Monthly Archives: October 2016

Amazon to buy publishing business of Tata-owned Westland

30 October 2016

From The Hindu:

US-based e-commerce giant Amazon today said it is acquiring the publishing business of Tata-owned Westland for an undisclosed sum.

The acquisition will enable authors of Westland, a subsidiary of Tata Group firm Trent, to grow their physical and digital book businesses in India as well as expand their reach to customers globally, Amazon said in a statement here.

Earlier this year, the online marketplace had acquired a 26 per cent stake in the Tata-owned publishing company,

“Our acquisition of Westland continues our commitment to India – enabling Amazon to bring Westland’s highly talented authors and their books to even more customers in India and around the world,” said Amit Agarwal, Vice—President and Country Manager at Amazon India.

“Since investing in Westland earlier this year, we have built a great relationship with the company and its authors.”

. . . .

 Westland has a history of over 50 years in retail, distribution and publishing.

Link to the rest at The Hindu and thanks to Nate for the tip.

‘A Man Called Ove,’ Sweden’s Latest Hit Novel

30 October 2016

From The New York Times:

Fredrik Backman got tepid responses when he sent out the manuscript for his debut novel, “A Man Called Ove.” Most publishers ignored him, and several turned it down.

After a few months and a few more rejections, he began to think perhaps there wasn’t a market for a story about a cranky 59-year-old Swedish widower who tries and fails to kill himself.

“It was rejected by one publisher with the line, ‘We like your novel, we think your writing has potential, but we see no commercial potential,” said Mr. Backman, 35, who lives outside Stockholm with his wife and two children. “That note I kept.”

In hindsight, that critique seems wildly, comically off base. Four years later, “A Man Called Ove” has sold more than 2.8 million copies worldwide, making the book one of Sweden’s most popular literary exports since Stieg Larsson’s thriller “The Girl With the Dragon Tattoo.”

“Ove” became a blockbuster in Sweden, selling more than 840,000 copies. It was adapted into a successful stage production and an award-winning Swedish feature film, which recently opened in the United States. Translation rights have sold in 38 languages, including Arabic, Turkish, Latvian, Thai and Japanese. Mr. Backman has gained a passionate fan base in South Korea, where the novel became a huge best-seller.

“No one really knows why,” Mr. Backman said in a recent telephone interview. “Not even the Korean publisher understands what the hell is going on.”

. . . .

Mr. Backman didn’t fit into any obvious genre mold, and there was no guarantee that his whimsical, oddball sense of humor would appeal to Americans. Atria was cautious at first and printed 6,600 hardcover copies, a decent run for a debut novel in translation.

The novel got a boost from independent booksellers, who placed big orders and pressed it on customers. The Book Bin in Northbrook, Ill., has sold around 1,000 copies, largely based on word-of-mouth recommendations.

“I passed it around to the rest of the staff and said, I think this is absolutely wonderful, am I crazy?” said Nancy Usiak, a bookseller at the shop. “There are 10 of us, and this was one of the rare occasions where we all agreed.”

Link to the rest at The New York Times

Here’s a link to A Man Called Ove

More Wretched News for Newspapers as Advertising Woes Drive Anxiety

29 October 2016

From The New York Times:

The gloom began earlier this month, when Gerard Baker, the editor in chief of The Wall Street Journal, sent a memo to employees that said, in part, “every story should be as short as it needs to be.” The next week, William Lewis, the chief executive of Dow Jones, which owns The Journal, announced a newsroom review that he said would be “underpinned by a series of cost-management initiatives.”

Two days later, on Oct. 21, the anvil fell: Mr. Baker informed employees in another memo that The Journal was looking for a “substantial” number of them to take buyouts, and that layoffs were in the offing.

With print advertising continuing to drop precipitously, you would be hard-pressed to find a newsroom devoid of uncertainty anywhere in the country. Companies like Gannett have recently announced layoffs, and its stock price has plunged during a monthslong pursuit of the company that owns The Los Angeles Times and The Chicago Tribune. The New York Times recently went through buyouts and has acknowledged that its newsroom will get even smaller next year. And for journalists at The Wall Street Journal, anxiety in the last several weeks has been especially pronounced.

. . . .

Across the country, those working in the newspaper industry are fretting as the end of the year approaches. Driving much of the anxiety is a steep drop in print ad revenue, once the lifeblood for newspapers. Spending on newspaper advertising in the United States is projected to fall 11 percent this year, to about $12.5 billion, according to the Interpublic Group’s Magna.

. . . .

At the same time, digital advertising and other forms of revenue have been slow to pick up the slack, leading news companies, including The New York Times, The Guardian and Gannett, the owner of USA Today, to cut costs by downsizing.

“More and more publishers are coming to the recognition that there’s a new normal,” said Alan D. Mutter, who teaches media economics at the University of California, Berkeley, and writes about the media on the blog Reflections of a Newsosaur. “And the new normal is not nearly as nice as the old normal was.”

. . . .

Across the industry, similar declines in print advertising coupled with the shift to digital and, increasingly, mobile, are driving newspaper companies to reconfigure their newsrooms.

. . . .

The Times has also announced its intent to make subscriptions the driving source of its revenue, an acknowledgment that newspaper advertising, both print and digital, can no longer be counted on to finance the company’s journalism on its own.

The New York Times Company, which will report its third-quarter earnings on Wednesday, said in August that its print ad revenue had fallen 14 percent in the second quarter. Digital advertising revenue dropped 7 percent.

Link to the rest at The New York Times

PG never likes to see people losing their jobs.

He included this item to demonstrate the great power of disruptive technology to affect some of the most established publishing institutions in the United States.

Book publishers are not immune to the same types of disruption. PG suggests that being contractually bound to such institutions under long-term contracts is a risky idea.

Far more thought and care

29 October 2016

Far more thought and care go into the composition of any prominent ad in a newspaper or magazine than go into the writing of their features and editorials.

Marshall McLuhan

Newspapers Are Social Media

29 October 2016

From The Wall Street Journal:

Digitization exposes weak links. Then it breaks them. So much so that it makes you wonder what people were thinking in the first place. According to Bharat Anand, a professor at Harvard Business School, the weakest link is between producing content and everything else. Such connections “are at the heart of what shapes any digitally touched business today.” He looks as the content assumptions behind various industries and shows the ways in which, over time, they can become an obstacle to success.

To see why, consider the news. By the end of the 20th century, the master plan for a newspaper in a major metropolitan area was something like this. Step 1: Produce great journalism. Step 2: Become a trusted news source (e.g., by winning acclaim such as Pulitzers). Step 3: Use that reputation to get subscribers. Step 4: Offer the readers up to advertisers. Step 5: Market the weekend edition to nonsubscribers. And, finally, Step 6: Use the virtuous circle (readers beget advertisers beget more advertisers) to charge high ad prices. With so many steps between content and returns, this reads like the master plan of a particularly ambitious movie villain. It worked—until it didn’t.

It’s easy for investors or observers to rail against media executives for not seeing weak links in their plan. But when the business has always emphasized steps 1 and 2 (the creation of good “content”), it is “perfectly natural,” Mr. Anand writes, that the immediate reaction to a new set of market circumstances is to shore up the severed links. The problem, as Mr. Anand points out, is that, in the process of shoring up a collapsing business model, companies often fall into the “trap” of thinking that content is all that matters. To be sure, content is important. But what matters more is the connection between that content and the rest of the master plan.

Digital technologies break the plan somewhere between steps 3 and 4. In the case of newspapers, companies that made articles free on the internet stopped the subscriber flow; then other internet sites offered advertisers other ways to reach consumers. The firms that foresaw this disruption or were never relying on the same plan in the first place fared better.

. . . .

The Content Trap” is a book filled with stories of businesses, from music companies to magazine publishers, that missed connections and could never escape the narrow views that had brought them past success. But it is also filled with stories of those who made strategic choices to strengthen the links between content and returns in their new master plans. The author shows that “winning strategies come from recognizing the context you operate in, not the content you make. . . . They come from setting priorities and saying no, rather than following the herd.”

One company Mr. Anand praises for going its own way is the publisher Random House (now Penguin Random House). When other publishers were working with Apple to try to find ways to fight Amazon’s push for lower e-book pricing, CEO Markus Dohle kept Random House out of any dealings (and thus out of the later antitrust tangles, too). To understand why, look at the old master plan for book publishing: Steps 1, 2 and 3 (creating content and finding readers) follow the newspaper model except with the goal of getting books into stores. But digitization hit the industry right between steps 3 and 4 (monetizing content) by bypassing stores and then bypassing shelves. The industry focused on Steps 1 and 2, thinking that providing books that people wanted to read would get them the rest. Often, however, books bought were not books read. They were, in part, meant to be displayed in homes or on desks as a signal that the person might have read them. For e-books, the situation is different. That’s why the romance genre flourished under the digital onslaught. Random House, it turned out, had one of its biggest print successes of recent years when it acquired “Fifty Shades of Grey,” a book that people don’t claim to have read if they haven’t.

Link to the rest at The Wall Street Journal (Link may expire)

H.G. Wells Hid a Sick Burn Inside The War of the Worlds

29 October 2016

From Atlas Obscura:

The images of three-legged Martian attack tripods and rivers covered in strange red weeds are now iconic symbols of alien invasion, thanks to H.G. Wells’ influential science-fiction novel, The War of the Worlds. But when his story was first published, the illustrations were a far cry from the otherworldly imagery described in the text.

. . . .

The War of the Worlds was initially published as a serial in Pearson’s magazine in the U.K. and Cosmopolitan in the U.S. throughout 1897. The story, one of the first to detail a war with another planet, was a popular hit during its initial serial run, at least with readers. Wells himself wasn’t so pleased with everything.

“Wells was unimpressed with the illustrations,” says H.G. Wells expert Michael Sherborne. “He complained about the pictures in a letter to his agent.” Goble, a fledgling artist at the time, who would go on to have a successful career as a children’s illustrator, envisioned the Martian fighting machines as ovular pods that stood on metal beams, which looked like a standard construction support. In some ways they didn’t look very alien at all. Ssee a modern critique of Goble’s art over on Open Culture.) And Wells wasn’t having it.

In 1898, the first collected version of The War of the Worlds was released, and Wells had added a handful of new and previously omitted material to the narrative. Included in the additions was an entire paragraph directly commenting on his disappointment with Goble’s illustrations. Found in Book II, Chapter 2, in the middle of dealing with a planet blasted by alien war, the narrator takes some time to give a sort of bitchy, and suspiciously familiar, critique of a war reporter’s illustrations:

I recall particularly the illustration of one of the first pamphlets to give a consecutive account of the war. The artist had evidently made a hasty study of one of the fighting-machines, and there his knowledge ended. He presented them as tilted, stiff tripods, without either flexibility or subtlety, and with an altogether misleading monotony of effect. The pamphlet containing these renderings had a considerable vogue, and I mention them here simply to warn the reader against the impression they may have created. They were no more like the Martians I saw in action than a Dutch doll is like a human being. To my mind, the pamphlet would have been much better without them.

Of course this in-world account was simply a not-very-veiled reflection of Wells’ reaction to Goble’s work. In his new book The War of the Worlds: From H.G. Wells to Orson Welles, Jeff Wayne, Steven Spielberg and Beyond, author Peter Beck describes the reasoning behind Wells’ objections to Goble’s artwork, saying, “Apart from being a very visual writer capable of both conjuring up vivid fantastic images for readers and representing his thoughts through picshuas, Wells had strong feelings about the illustrations employed to support his work, as evidenced by his above-mentioned critique of Goble’s illustrations used for the story’s serialization.”

. . . .

In subsequent years, Wells would loosen up his opinion on Goble’s illustrations, coming to see them as just another vision of his creation. Wells eventually authorized the use of Goble’s illustrations in printings of The War of the Worlds, and as noted in Beck’s book, he seems to recant his negative opinion of Gobles’ work, saying in a 1920 interview in Strand magazine that the art “was done very well by Mr. Warwick Goble, during its first magazine publication.”

But the dismissive critique remains in modern editions of the text to this day. Just like his greatest Martians, H.G. Wells’ greatest troll is now a permanent fixture in the sci-fi canon.

Link to the rest at Slate and thanks to Matthew for the tip.

Amazon’s Q3, Guidance Make A Bear Move, Or Crash, Plausible

28 October 2016

From Seeking Alpha:

Less than two weeks ago, I wrote an article titled Amazon – Next Stop $100 Or $1000?. This bearish article may have been a little different from the usual, as I admire what Jeff Bezos and his capable team have created. I just do not think it was or is worth anywhere near where it trades, and that includes the after-hours trading Thursday. All that did was take Amazon back to the (roughly) $760 range where it traded when Value Line reviewed it in its August 12 edition.

. . . .

The problem with AMZN is that it’s a fine company that does a lot right. But, as I argued in the article linked to above, it got caught up in a double bubble of Internet bubble 2.0 AND the ZIRP bubble which seemingly “justified” 50-100X P/E’s.

But AMZN has serious issues.

Basically, it operates in a tough business. So it passes a lot of cash through its portals but can only take a small portion of it out for itself. Otherwise, if it charged more, shoppers would just find a new tab at some competitor’s website and but from it.

That’s why its earnings need to receive maximum attention, not sales.

. . . .

The company led with cash flow, which is related to sales, but a company can have lots of cash flow and not even be profitable. Here’s the most important lines, buried a bit in the introductory part of the release:

Operating income was $575 million in the third quarter, compared with $406 million in third quarter 2015.

Net income was $252 million in the third quarter, or $0.52 per diluted share, compared with $79 million, or $0.17 per diluted share, in third quarter 2015.

Operating income barely rose. Yet stock-based compensation was estimated at $776 million for Q3. Or, more stock-based expense than operating profit. Is that fair to shareholders, or is AMZN working mostly for insiders? Note that shares outstanding, reflecting insiders cashing out on vested stock-based compensation, rose yoy from 489 to 496 million shares, or 1.4% dilution.

Despite the slow growth of operating income:

Net sales increased 29% to $32.7 billion in the third quarter, compared with $25.4 billion in third quarter 2015.

Meaning that very little of the sales gain was profit; all the rest was expense.

. . . .

Doesn’t this company care about profits at all? Also from the press release:

Fourth Quarter 2016 Guidance

  • Net sales are expected to be between $42.0 billion and $45.5 billion, or to grow between 17% and 27% compared with fourth quarter 2015. This guidance anticipates approximately 60 basis points of favorable impact from foreign exchange rates.
  • Operating income is expected to be between $0 and $1.25 billion, compared with $1.1 billion in fourth quarter 2015.

Maybe they are sandbagging things a little. But to project, in the holiday season, as little as no operating profit, is just not acceptable in this giant company. If any other company than AMZN, Tesla, or Netflix did this, the stock would absolutely crater. But not these guys.

. . . .

A key question was posed in the Q&A:

Justin Post – Bank of America Merrill Lynch

… I guess when you look at fourth quarter guidance and you back out AWS, it suggests that margins are, on the core business, are going to be pretty down versus last year. Do you view this as a abnormal investment cycle, or just part of the overall kind of ebbs and flows of the business? And then long-term, I know several years ago you talked about maybe high single digit, low double digit margins long term. I wonder if you could refresh us on that, and also just let us know if you think International has structural margin differences than the U.S. in the core retail business.

Brian T. Olsavsky – Amazon.com, Inc.

… As far as long-term operating margins, I can’t forecast that right now. I can’t forecast that for our AWS business either.

Yikes! As AMZN was already hot, hot, hot – but wanted the stock even hotter, the company dangled massive margin increases in front of Wall Street. Now, their casual message is to forget about that goal. Now, the goal is to pamper the customers, as Mr. Olsavsky went on to explain:

We are again working on two fronts. We are honing the businesses that we’re in and making them as efficient, as profitable as possible while also investing very pointedly and very wisely, we believe, in things that will enhance customer experience and create lasting businesses for us down the line. We’ve said we want things that customers will love, can grow to be large, will have strong financial returns and durable and can last for decades. So that’s still our mission. We have pillars of the business right now with Marketplace, AWS and Prime and we’re actively looking for a fourth and fifth pillar.

. . . .
 No dividends, no actualy interest in sustainable profit streams in the next many years. Just saying “we want [to provide] things that customers will love” is not good enough at thisstage of the game. Not when AMZN is one of the most highly valued companies in the world.

Link to the rest at Seeking Alpha

PG is anything but a savvy investor or financial expert, but the OP seems to be complaining that Amazon has gone back to doing what it has done for most of its corporate life prior to the last year or so – growing just as fast as it can.

Long-time investors have lived with the promise (and results) that Amazon can do much better things with its money by keeping the pedal to the metal than it can by paying dividends to shareholders. Those long-time Amazon investors have seen the value of their stock increase year after year after year.

Maybe that will all change, but Amazon’s latest message seems to be, “We’ve proven we can make profits for the last little bit, but we still want to grow. You can jump off with your capital gains or stay on for the ride.”

Patience

28 October 2016

Patience is not simply the ability to wait – it’s how we behave while we’re waiting.

Joyce Meyer

3 Things Your Traditional Publisher Is Unlikely to Do

28 October 2016

From Jane Friedman:

Years ago, when I still worked for a traditional publisher, I wrote a blog post about the No. 1 disappointment of all published authors: the lack of marketing support from their publisher. This was back when social media was still a fringe pastime, limited mostly to MySpace. So if your publisher wasn’t investing in marketing or publicity, you probably had few available tools to market and publicize your work outside your community—unless you had funds to hire a publicist or a national platform of some kind.

Today, some form of online marketing by both author and publisher is essential for all titles, and while traditional forms of marketing and publicity are still key—everyone wants a mix of online and offline exposure to maximize word of mouth—publishers’ launch efforts may be focused primarily or entirely on online channels. It tends to be more efficient, targeted, and cost effective.

. . . .

1. Send you on a national book tour

This is probably the biggest author disappointment by far, judging from the message boards and discussion groups where I see new authors unleashing their anxieties and questions.

Here’s why publishers won’t send you on a tour: book events are among the least cost-effective ways to sell books. You may get very low turnout at multiple venues and sell not more than a handful of copies at each event.

The big reason to tour across many cities is usually to secure media coverage and reach the many more people who don’t attend the event—the more times and more places that people hear about your book, the better. Unfortunately, as most of us are too well aware, local media isn’t what it used to be and the opportunities for book coverage have diminished, which further deteriorates the value of touring.

That said, events help authors network and build relationships with booksellers that pay off over the long term. But the benefit is rarely tied to selling books in the short term unless you have a marquee name that can draw a crowd.

All this isn’t to say a publisher won’t assist or support you in setting up local or regional events, or even with more extended efforts that you wish to plan. But don’t expect them to set up or fund a multi-city tour to places where no turnout is guaranteed. It risks everyone’s time and resources.

. . . .

3. Market and publicize your work after the initial launch period has passed

Once you’re aware that your publisher’s most important efforts and planning happen before the book is released, it starts to makes more sense (maybe!) why their post-launch activities may be minimal. The plan that was decided upon months ago has already been set in motion, so it’s mainly about coordinating, following up, and building on any momentum that has been created.

Unfortunately, the large majority of book launches involve some sales, some reviews, but nothing outstanding that would motivate the publisher to invest more resource. For authors who haven’t prepared or thought about the launch, this is when panic sets in, especially if they expected more from the publisher. While publishers do a lot of marketing and publicity work to the industry itself (booksellers, wholesalers, libraries, reviewers, media), this work tends to be invisible to the author. For better or worse, these industry-facing activities may not produce the sales everyone wants, or they may not meaningfully affect how many readers hear about the book.

Link to the rest at Jane Friedman

PG will note that he’s never seen a publishing contract from a traditional publisher that obligates the publisher to do anything at all to market/promote/publicize, etc., the author’s books.

The only contractual launch obligation of the publisher in virtually any traditional publishing contract is to “publish” the book within an extended period of time – perhaps 12, 18, 24 months after the publisher’s formal acceptance of the final manuscript. “Publish” is never defined. Merely listing a book in the publisher’s catalog might qualify.

PG says low turnout at bookstore events is a reflection of the substantial reduction in bookstores’ ability to influence readers and promote particular books.

Reading To Dogs

28 October 2016

From The Association of New Zealand Booksellers:

Reading to dogs? Dogs in bookshops? Scandinavian delights? Buy a book and feed an author?  All this, and much more, are all on offer on Saturday, 29 October for NZ Bookshop Day – Your Place, Your Bookshop.

This year 170 bookshops from Whangarei to Invercargill are celebrating their vibrancy and uniqueness, as well as the vital role that bookshops play inour communities.

Booksellers NZ chief executive Lincoln Gould says, “Bookshops are the spine of our community, offering places of discovery, delight, refuge and relaxation. Bookshops mean the world to book lovers, and to New Zealand authors – they are places of escape, treasure and serendipity.”

. . . .

  • Wellington’s new bookshop, Ekor (Swedish for squirrel), will have its café serving Swedish delights. There will beas many Scandinavian books that owner Niki Ward can get her hands on. Ekor has teamed up with Wellington publisher Gecko Press to supply some great children’s books in their original languages – including Swedish.
  • Children can read to dogs at  Paper Plus Wanaka on NZ Bookshop Day. Kids can bring in their favourite book or the dog can choose its own reading matter. Paper Plus is supporting a local remedial reading scheme ‘Reading to Dogs’ that helps improve children’s reading fluency by reading to dogs, as well as lifting their own confidence in their reading ability.
  • Dunedin’s University Bookshop has a strong clientele of Dunedin children and adults, as well as students and academics. Special booklovers’ red velvet cupcakes decorated with tiny books will be available, as well as an opportunity to Buy a Book and Feed an Author. On NZ Bookshop Day, book buyers can take some of the chocolate kisses on the counter, and ‘feed’ one of the authors who will be writing at the table in the middle of the shop. UBS Otago says that last year our authors just loved this interaction, and they’re sure it will be just as popular this year.

Link to the rest at Booksellers NZ

PG is always in favor of feeding authors.

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