Sunday, April 28, 2013

MediaWeek (V7, N17): Amazon Taxes and Apps, New Magazines, Fixing Higher Ed, Library Budgets + More

Short takes from the New Statesman:
Over 150,000 people have signed a petition demanding that the UK government take “decisive action [to] make Amazon pay its fair share of UK corporation tax”. The petition drafted by Frances and Keith Smith, independent booksellers from London, was inspired by Margaret Hodge’s questioning of representatives from Google, Amazon and Starbucks last November.
John le Carré has published his 23rd novel: A Delicate Truth. The team behind Skyfall and Tinker Tailor Soldier Spy have made a short film to celebrate. Watch it here
Paper Airplanes is a great title for this article about a new body of travel magazines (Independent):
And yet, as if to counteract this, there is a growing body of beautifully designed, weighty magazines that are very much about digging deep into a place. The geographical place first, but also the happenings, the history, the beauty and the deprivation. They are locally focused, yet global, rather than parochial; and it's not a coincidence that some of the most successful versions are labours of love.

Boat Magazine is aptly named. The office, run by husband and wife Davey and Erin Spens, is based in London, but it moves to a new city each issue. They gather up the most talented writers and photographers they can find, take them to the city they're featuring, cover their travel, food and living costs in lieu of paying them for their work, and – in Erin's words – "set them loose". They migrate for at least five weeks, and live together while collecting the content for their issue.

When Boat began, it had a strap that read 'the antidote to lazy journalism', but Davey and Erin quickly scrapped that because they didn't want to pit themselves against anything. They just wanted to do more. "Once we talked to more people and [heard] their stories, the cities were so different to how they were portrayed on the news," says Erin. They've had four issues so far – first Sarajevo, then Detroit, London and Athens. They've just had a special-edition newspaper about Derry-Londonderry, this year's UK City of Culture. Next stop: Kyoto, set to be published in May. "It's really fun," she says. "It's manic adrenaline the whole time."
Fixing higher ed should be done faster. Why are they waiting? From Inside Higher Ed:
Yet we’re slipping. Simply put, our graduation rates are too low, our costs are too high, and too many students are slipping through the cracks. Reformers -- and universities themselves -- grasp these realities and want wholesale changes that will fundamentally alter how we think about higher education.

Those long-term battles are important, even necessary. New innovations in distance learning and nontraditional degrees may provide new pathways for students. But such changes may take decades. In the meantime, we have millions of college students taking on ever-higher debt loads for a long, winding road to a degree. We need to make immediate changes to affirmatively lower costs – not just “increase affordability” – while we raise graduation rates. We need to work within the existing framework to do what we’re already doing, but do it better and cheaper.
Library Journal discusses an interesting report into library budgets and serials pricing (LJ)
Meanwhile, sequestration is not going to make state and local funding problems any easier. Historically, the federal government provides about one-quarter of all state revenues, and owing to sequestration, the federal government is now poised to make deep spending cuts. If a significant portion of sequestration is left in place, federal funding for schools and other non-entitlement grants to states are on track to reach their lowest levels in four decades, measured as a share of the economy.

The lack of public funding translated to flat funding in libraries. Data from the Association of Research Libraries (ARL) shows that median total expenditures for ARL libraries dropped slightly from 2011 to 2012 ($24,052,161 to $24,000,677). Since the ARL members are a mixture of public and private organizations, increases in expenditures by the private universities helped offset declines in spending from the public universities and the overall result was a slight decrease in expenditures.

There is good economic news out there, but most libraries that rely on public funding have not fully recovered from the recession. Flat budgets and ongoing inflation in costs are forcing libraries to continue to find creative ways to keep current services. In this environment, disproportionate serials prices are thrown into greater relief.
Anyone considering app building needs to consider Amazon as this report from Techcrunch makes clear:
Amazon doesn’t share details on how well its Amazon Appstore apps sell, but according to mobile app analytics firm App Annie, the app marketplace is seeing growing traction among developers. The company surveyed over 1,500 developers, and found that 22.5 percent of them were now publishing to the Amazon Appstore, and half of that group (50 percent) cited the game category on the Amazon Appstore as their leading revenue driver. Previous reports have confirm roughly the same thing: that Android developers are turning to Amazon’s Appstore in greater numbers, and are seeing the benefits. Amazon Appstore’s revenue per user tops that of Google Play, or even iOS, in some cases. Last summer, for example, mobile gaming startup TinyCo, was saying that its revenue per user was higher on Amazon than on iTunes or Google Play. However, another report from Flurry said that iTunes was number one, and Amazon was in second place in terms of its revenue generation capabilities. Flurry had found that for every $1 spent on the iOS store, Amazon’s store generated $0.89, and Google Play $0.23.
From my twitter feed this week:

Apple Passes 45B Total Unique App Downloads At A Rate Of 800 Per Second With Over $9B Paid To Devs A $1bill/quarter
Netflix Beats Analyst Estimates, With 29.2 Million US Subscribers And $1 Billion In Q1 Revenue
British Library feels the Arab wrath: Balfour Declaration is going to Israel 

Saturday, April 27, 2013

NFAIS Workshop Presentation: Predictions for Publishing 2013

Presentation given at a workshop for NFAIS in April 2013.

Page 1 – Introduction

Thank you again for the opportunity to speak all of you today.  As some of you, know I also spoke last month at the annual NFAIS meeting here in Philadelphia and on that occasion I spoke how I see the immediate future for education publishing.  Some of that presentation remains in what I am going to speak about today but I was also asked to speak about some of the current divestiture and acquisition activity.




For anyone interested, I have posted the presentation from the annual meeting on slideshare and I believe it is also available on the NFAIS site.
Our industry has a multitude of facets but is generally is broken down into three segments: Trade publishing, academic and scholarly publishing and professional or information publishing.  I routinely tell people that it is always good to remember that our industry really isn’t that big in revenue terms.  It has also not been a particularly dynamic industry over the past 600 years or so.  As we go further into the 21st century, both of those characterizations are increasingly debatable and I am going to lead with that in a minute.

Page 2 – Change:
It will be obvious to everyone here that everything is changing in publishing today.  By ‘everything’, I mean all the underlying drivers and assumptions about how our industry is defined and how it works. 
We fight to find solutions for growth – even stability - and our natural tendency is to seek an emphatic view of the future.  Which of course is near impossible.  The task is made harder as change comes faster and faster and more unanticipated scenarios occur than any of us have ever had to deal with.   MOOCs could destroy education, GOOGLE becomes a database owner and Netflix produces and sells serialized stories.  These and many other disruptors like them keep all of us awake at night.   Or perhaps we dream of being a disruptor just once.
Focus on the customer is critical of course but these days not always in the way you may think.  The publishers I note in this presentation spend significantly to understand theirs but some savvy publishers are also looking at the customers in other industries for insight into how they can deliver their content and services.  One publisher in particular notes their current strategy is the direct result of 2 years of intense research into their customers’ needs and requirements.  Another, references consumer websites as an inspiration for their delivery platform development.

Page 3 – Change leads to Opportunity
As I go through my comments I want to look at the business from a macro perspective and challenge the statement I made earlier about the size of the industry.  Then I will attempt to communicate how I believe publishers are reinventing themselves to compete on a different level and in a very different context than their most recent history.     
This is not the business many of us grew up with.  To paraphrase a comment attributed to John Ingram: “it’s not our fathers’ business anymore”  

Page 4 – What is this business?
First, two basic questions:  What business is this and how big is it?  Perhaps obvious questions on the surface but as with many things in recent times the questions are beginning to generate new definitions.
Any item sold, described, broadcast, advertised and even printed is dependent on information published in some form.
How about databases, data sets from experiments, market research, polling information, transaction data and usage information?  We should include information in company files describing products, diagrams, plans, documents, records, and more.  Much of this material that used to remain private or hard to access is becoming accessible but not however, necessarily readily available.
In my opinion, all companies are publishers in some fashion and their ‘published material’ is of increasing importance to them.  The good news for traditional publishers (all of us) is that most of these companies outside our industry aren’t particularly good at publishing or distribution. As more continues to be published, we as publishers are presented with significant new opportunities to help these content producers achieve their goals. 
Publishing is in the process of being redefined as traditional barriers to publication and distribution collapse for everyone from individuals to corporations.  There’s immense opportunity in that process for companies with expertise.

Page 5 – $500Mm?
This leads me to my second question: how big.
All that ‘published material’ has market value but is not accurately counted by anyone.  Perhaps it can’t be.  If you agree our market size is larger than we recognize then we should also have more opportunity than we might otherwise believe.
Through the 1990’s the US market was estimated around $25-28Billion. The Book Industry Study Groups ‘under the radar’ report estimated the market to be worth many billions more. The ‘non-publishers’ BISG counted ranged from Mattel a major toy manufacturer to individuals delivering monthly real estate seminars at their local Holiday Inn. Currently, the US market is generally thought to be worth around $35bill.  Give or take.

Page 6 – Ask Pearson
The question of how big, is also increasingly complicated by how some publishers are redefining themselves.  There is a school of thought in business education that says if you find yourself tapped out of a market – then redefine the boundaries.  I’ve a good example of this later but this chart from Pearson’s annual report is interesting because they don’t measure themselves against ‘publishers’ exclusively.  This is chart tells you everything you need to know about Pearson’s business strategy.   And by the way, just the revenues on this page add to $32bill

Page 7 – Content platforms are the future
I’ve am very interested in the concept of content delivery ‘platforms’ which aggregate, serve and engage users around specific types of activity.  And this is a concept I discussed at the conference earlier in the year when thinking about education publishing.  I will use the example of Lexis Nexus in this presentation to show how they have used the platform construct to radically redefine their competitive marketplace.  Delivery platforms aren’t a new idea and professional and information publishers have done a lot of work with the concept over the past ten – fifteen years.  It is still true however that many content owners and publishers have trouble with the idea that their traditional product – books, journals, etc.  – must be extensible to include applications, source data, user data, third-party content and “functionality”.

Page 8 – A bigger boat
Looking back on 2012 for a minute:  We saw a slowdown in the growth rate of eBook unit sales; indications of a possibly significant substitution of tablets for eBook readers; a reconfirmation in several examples of a lack of enthusiasm by students for eBook based learning; a major strategic publishing merger destined to create a trade publishing goliath; and the sale of one of the big three education companies. 
I think we will see more of the same in 2013 and 14. 

Page 9 –  Where to look
The expectation that the big trade houses would consolidate has persisted for at least five years: In fact, it is more surprising that the Random House/Penguin deal didn’t happen sooner, and now that it has, it’s a foregone conclusion that there will be another trade merger announced in the next few months, involving some combination of Harpercollins, Simon & Schuster and Hachette.  Perhaps all three will combine which would equal the deal announced last year in scale and significance.  But that’s unlikely.  One publisher will almost certainly end up the “odd one out” and it will be interesting to see which it is and what they do next. 

Page 10 – Bringing gifts
On the education front, there has been widespread speculation that some merger of Cengage and McGraw-Hill Education will take place this year, since the two companies may end up with a common owner.  If they do, there may not be a full combination in the short term but some trading of assets may take place immediately to rationalize the respective businesses with deeper integration to come, perhaps, in 2014-2015.  Ultimately, 2013 may bring more significant change in the trade and educational landscape than we’ve seen in many recent years.  There will be a lot of focus on the big trade merger and, the industry’s other players will have to fight aggressively not to lose any advantage.  “Bigger will be better” when it comes to applying economies of scale in a business whose underlying business model is changing radically.  In education, we may be paying attention to McGraw-Hill and Cengage but Pearson, as the market leader, is likely to embark on even more aggressive strategies this year.  Under its new CEO, and with the divestiture of Penguin and possible sale of the FT Group, the company has forcefully declared education to be its focus.  In summary, a fairly active last 12 months with indications that there is more to come.   

Page 11 – Change is coming
Just to return to the concept of changing circumstances, I think it is important to note that each segment of the publishing industry is clearly at a different stage in their evolution as they migrate to electronic based publishing.  Based on their different starting points, I see a different set of key imperatives for each segment as they continue their evolution.
Hardest to predict is the information segment because the business in many respects is already so advanced.  They will continue to integrate content and technology and offer customers more flexibility in how they gain access to these integrated products via software as a service, application providers, outsource partners and embedded content. 
Interestingly, the changes in the amount of content to be curated, managed, organized etc. may hit this segment hardest.  While this segment is the most sophisticated of all publishing segment publishers they will still find it difficult to keep on top of the data explosion and provide meaningful actionable data for their users.  In order to cope you will start to see publishers open up their platforms so that third parties can build applications on top of the publisher owned data, the use of taxonomies, and ontology’s will be increasingly important and probably the employment of content curators – perhaps librarians – or more accurately one part curator one part mentor who will curate and guide users in the use of the technology available to them.
Education publishers are following the lead of the information publishers in expanding their value chain to serve more educational segments and in the process they become solutions providers rather than textbook publishers.  These publishers will also increasingly offer custom content creation for consumers/students, administrators, academics and state systems.  The education segment will begin to catch up to the level of sophistication that the information publishers continue to exhibit.
Trade will generate the most attention but change will be slow.   All major publishers are currently reevaluating their value chain and redefining what it means to be a publisher.  For example, they are changing their workflows to rely more on xml and changing their author contracts.  How their activities evolve will be interesting to watch but don’t expect much.  Trade publishers will also continue to experiment with direct to consumer models and will develop subscription products.

Page 12 – 2600+ transactions in the last six months
Across the industry deal growth continues apace across all publishing segments but is now broader in scope than ever before.  Deals reflected here cover software, content, services, people/talent, outsource service bureaus, and process providers such as financial transaction providers.   A business deal in the publishing industry can now mean almost anything.  Represented here are deals for seed money in the low thousands for startups to multi-million dollar deals for investment and acquisition. 
Investment money is flowing to new companies seeking to take advantage of a business in transition which is why private-equity investment in education – for example - is rapidly increasing year on year from $100 million in 2007 to nearly $400 million last year.  What is happening in education is very exciting.  The manner in which teaching is delivered, how content is created and how success is measured are all under stress.  A primary enabler of this change is technology, and specifically, the Web – which will be obvious to most of us here.  A lot of the deal activity is related to education.

The scene is very vibrant – some say it is almost too frothy.

Page 13 – Corporate dev 101
To segue slightly and to think about the merger activity, the justification for a merger is often presented as an opportunity to save cost and expense, apply economies of scale and/or gain access to a new market.  At this point, expense and efficiency gains are more likely to be the primary drivers in both the McGraw-Hill and Random House Penguin cases.   Let’s look at three quick examples.

Page 14 – Why Random Penguin?
Each publisher will reduce headcount, facilities, distribution and other areas in order to deliver the same total quantity of titles.  They will be able to apply their investment over a larger number of products particularly important as they take full advantage of the move to digital.  In all publishing segments the value chain is compacting, making it far easier for content producers/authors to reach consumers directly.  This in turn, is changing the financial model on which publishing is based.  The functional areas where publishers added margin in order to make a profit – overhead, distribution, marketing & sales--are becoming less important (though not unimportant).  The implications of these changes for publishing houses in the context of the transition to digital have been clear for many years, but addressing how their businesses must change to cope with them is nowhere near complete in the larger houses in both trade and educational publishing.  Smaller, more nimble trade publishing companies like Hay House and SourceBooks have travelled much further down this path.

Page 15 – Innovation is still on the fringe
Most of the innovation and change in publishing is happening on the edges of the publishing industry.  In trade in particular, it seems that we’ve entered a period of stasis as publishing transforms itself.  By the end of 2011, it seemed to me that many publishers had absorbed the implications of their transition to electronic content delivery and have developed collectively tunnel vision in addressing the practical implications of this transition.  (That’s not the same thing as saying they have solved their problems.)   While traditional publishers take a break, we see a lot of new start-ups and investments being made in companies offering many new ideas from serialization platforms, custom magazine like platforms and many other niche offerings.

Page 16 –  Trade publishing is a mess
This was a quote taken from an interview I did during a consulting project recently.  In context, the opinion was that innovation and new thinking doesn’t go very deep and is concentrated at the top of the organizational pyramid. 
Most medium and small publishers are really no-where when it comes to understanding how to operate in an e-Content world.  In my various engagements over the past three years it hasn’t been unusual to come across publishers who have their content on fewer than three eBook retailer sites.  Some have no eBook strategy.  This lack of knowledge and experience has another more insidious impact in that some of these less informed publishers are particularly reactionary on the negatives with respect to e-Content and the issue of piracy.

Page 17 – McGraw Hill Divestiture
Looking at the MGH divesture the similarities to the Cengage deal that took Thomson Learning out of what is now Thomson Reuters are obvious.   One segment of MGH was growing rapidly and had far better margins and the education segment was on the cusp of a significant market change requiring new investment, management, significant risk and perhaps a loss of market dominance.  At Thomson, the seeds of their strategic decision to divest was long apparent while at MGH the divestiture seems to have been conducted under duress due to intense shareholder pressure.   That said, now that MGH is out from under the corporate parent one thing they probably will not have to deal with is the crushing debt that Cengage appears to suffer.  MGH may be better positioned to make the investments and take the risks than Cengage and without Wall Street reporting requirements that may have dogged their performance over the years.

Page 18 – Education faster than expected
Education has been rapidly digitizing content, building digital workflows and creating ‘born digital’ educational materials for the past five or six years.   Pearson in particular has had success here with their My Labs series.
As their markets mature, College has become more accepting of the migration to electronic but experiments with E-readers  have largely failed both because of functionality and because of content ownership.  That said, there are a lot of new initiatives in higher ed and K-12 that depend on electronic delivery of content and these will grow in popularity in the short term.
Education publishers are following the path of information publishers in building content and service platforms that broaden the publishers offering beyond simply content.  Several of the larger publishers now provide course and school administration software, student assessment products, schools and learning institutions and other similar companies that expand their market.  With a services model for example, publishers are able to offer numerous options from ‘build your own textbook’ functionality to testing and remediation tools.

Page 19 – What do you mean there’s a test?
Assessment and adaptive learning tools also garner significant attention but so far mostly in K-12.  While K-12 hogs the limelight at the moment, it is my belief that assessment in higher ed. will eventually be bigger than anything we will see in K-12 because only through assessment and adaptive learning will we be able to bridge the gap between higher education and industry.  Assessment in higher ed. will be used to evaluate and test a student’s mastery of what they learned in college as a basic criteria for the career they want to start.  As students navigate through college they and their faculty will be able to monitor performance and remediate where needed.  The basis of their ‘assessments’ will be more closely tied to their career objectives.  Adaptive learning tools will also enable students to see how their approach and behavior impacts their ability to learn.  In the old world, students have to wait to be graded but it is conceivable that these new tools will lead students to take more responsibility for their own education, empowering them to ensure success.  There should be little surprise that assessment will be used for career advancement in more fundamental ways and to support education programs for people already advanced in their careers.  There are already many examples of community colleges collaborating with local businesses to produce workers for them, and new companies, like UniversityNow, are developing cost-effective degree programs correlated to industry and business requirements.  There will be many more.

Page 20 – Google buys ITA software
There are many examples of acquisitions being made in the professional and information space.  Thomson Reuters which I alluded to earlier is a case in point.   Google’s purchase of ITA is an interesting one since it shows that competitive challenges can sometimes appear to come from nowhere.   ITA is a very sizable business providing B2B data and services to the travel industry.  Google wants to improve their user experience since they know many people search Google looking for travel information.   Suddenly the landscape has changed fundamentally for any other company in this space and for the customers of ITA who had B2C sites and businesses dependent on ITA content.  
Because professional publishing is more advanced in many ways from the other publishing segments the boundaries of their businesses are no longer clear cut and they become susceptible to unconventional competitive threats.  Of course the opposite could also be true.

Page 21 – Driving M/A Activity
Here are just a few of the acquisitions you may have heard of over the past year.  I’ve made a characterization as to the primary motivation for the deal and you can see I think motivations can be highly varied.   Buying products is an obvious motivation but in a start-up culture we are also seeing many acquisitions for talent.  This would be for the immediate work a team may be doing but also for the cultural change new innovative talent may bring to a staid older company.    Newer companies can also build something of value in much shorter time frames.  For example, on the tutor.com acquisition an executive noted that tutor.com had done the hard part in building a network of high quality tutors ready to help students improve their learning across the US.   The acquirer recognizes they can’t do this to the same degree of effectiveness.

Page 22 – To name a few

Page 23 – What’s the platform Kenneth?
I’d like to discuss how all publishers are likely to evolve over time as many professional publishers already have in their development of a platform approach to customer engagement.

Educational publishing as a segment is currently implementing their version.  Pearson began their adoption of the theory ten years ago.

Page 24 – A successful platform
In education generally, all education-content companies are only at the beginning of their transition from content providers to embedded content and services providers.  Professional information publishers such as Bloomberg, Thomson and Elsevier have long been able to provide aggregated content and services at the point of need and education publishers will be doing the same thing in the not-too-distant future.  At the Consumer Electronics Show in January, McGraw-Hill made some interesting announcements about product development investments they have been making which presage how this “services approach” may take shape.  But it is still early days.  We will see an aggregation model emerge in education, where content ‘platforms’ deliver content and services based on a different financial model than the current retail or ‘student buys the book’ model.  Publishers are being pushed by some important customers: Initiatives underway in California, Minnesota and Indiana for example show that experimentation is starting to happen with more frequency and publishers are being challenged to think differently about their market.

Page 25 – Platforms network transitions
What platforms do is ‘normalize’ a set of behaviors that occur when people/customers communicate and transact information, goods and services.  As the platform attracts more users – presumably because they create value for the user – the cost of providing the platform becomes cheaper. 

Page 26 – Lexis Nexis
I would like to run through one example to show how Lexis Nexus approached their product development around platforms.  LN spent 2 years understanding the workflows, needs and requirements of their customers and implemented their solutions accordingly.   Customer insight is very important and LN made it the center of their development activity; however, sometimes looking beyond your current customer base can also be instructive.

Page 27 – Trailblazers help
This was a quote taken from the keynote presentation at last year’s SIIA education summit in San Francisco and it was almost an off-hand comment.   The insight is important in that we can become too embedded in our natural market when our customers are exposed to many more influences.  If your interaction with your customer via your website isn’t as intuitive or easy as Google then you may be in for a struggle because this may be what many of your users expect.

Page 28 – 4x Market size
The context of the LN development effort is also instructive.  Remember I suggested redefining the boundaries of your market?  As a total solutions provider, LN has redefined the marketplace in which they operate.
1972:      They operated in a print market worth $2bn
1990:      A legal research market: $7Bn
2004:      A Legal Research and Tools Market: $12bn
2008        As a ‘total solutions provider’ their market is worth $48B
How did this happen?  It is not because their market has suddenly exploded; rather, they now offer services and solutions to a much wider segment of the legal industry. 
I don’t think there is anyone in this room who wouldn’t want to see their market opportunity quadruple from $1mm to $4mm or $10mm to $40mm.  At least I hope not.  Anyway you cut it that represents a massive change in expectations and opportunity.  Remember my market size estimate and perhaps it starts to look more reasonable if LN thinks the value of their legal publishing market to be $48B

Page 29 - Lexis Nexis model
In practical terms this is how LN views their market.  Each of the practice areas across the top of the chart are supported by the content, applications, databases, etc. below.  The company started with significant content but has aggregated companies with particular content (recently public records) and purchased solutions providers that support their client’s requirements.  LN supports all levels of the legal community from small office, to large partnership to corporate counsel.
To their customers they provide a range of products including specific legal content, business & client news, accounting and practice management software and even social networking.

Page 30 – Education model
What would the LN model look like in education?  Pearson is already there - years ahead of their market.  In the coming years, with the influx of PE into this market we will see a ‘race’ develop as the larger players build models similar to one I described at LN.   Cengage didn’t get off to a particularly good start in this respect but MGH will do better.
Pearson has consolidated content: K-12, college and distance learning.  They have acquired educational material developers, assessment & testing companies, remediation tools, course management tools and school administrative management products.  These acquisitions include traditional content but importantly software and services application providers.   Pearson – an educational publisher – also owns a chain of schools. 
 
Page 31 – Another look at Pearson
Pearson operates in a market segment significantly larger than the one they operated in five years ago.  And this chart tells the story.  Here they see themselves competing with for-profit educational companies, traditional education companies and other media companies.   As I said before, all you need to know about Pearson’s strategy is documented on this chart.
They also have a complete offering just as LN has for corporate attorney.  Pearson is in a position to say to schools and colleges we have all this content but we can also do far more to help you manage your institution more effectively.

Page 32 – The innovators
Opportunities for innovators will continue to emerge in all segments   However, many of the niche or narrow solutions currently on offer--whether they be assessment, content-delivery or search tools-- will ‘run out of market-space’ as these solutions become embedded in, subsumed by and/or offered as an attribute of the platform solution. 

Page 33 – Competition from Customers
Over the past 18 months, the higher education establishment has been rocked by the development of these Massive Open Online Courses or MOOCs.  And I almost feel compelled to mention them here.

So compelling are the opportunities to launch MOOC-based ‘institutions’ that high-profile faculty have quit their boring professorships and started new companies delivering MOOCs.  Even big-name traditional schools have banded together (like a Big East or PAC10 for MOOCs).  You will have heard of these companies with names like Coursera, EdX and Udacity.
On the content side, the textbook still reigns; however, faculty are seeking more choice and power over the course materials they assign their students and, increasingly are looking for custom solutions from their primary textbook publisher.  Permissions revenues – for individual chapters and journal articles – are growing faster than overall textbook revenues, signaling that faculty are making more specific content choices for assignments.  Custom textbook publishing is also growing faster than the overall education market as the largest publishers have upped their game by being able to provide tailored products to their customers. 
Where MOOCs begin to produce their own content and some already are – or they use open resource content – the implications for traditional textbook publishers could be profound.

Page 34 – It was all about Access not Content.
The rapid rise of the MOOC suggests big opportunities when education can be ‘freed-up’ outside the constraints of the traditional model.  In simple terms, what MOOCs address is the disparity between supply and demand.  Stanford can only accept so many students; but on the Web, all bets are off.  To give you perspective, some of the early classes registered over 150,000 students.  In one Stanford MOOC, of the top ten students who completed the class, none were full-time “Stanford” students.  Not only could Stanford not address this audience but when they did some of the students performed better than the ‘real’ Stanford students.  The reason many elite schools jumped so quickly on the MOOC band wagon and formed the companies I mentioned earlier is that they know they must be positioned to leverage their ‘brands’ on a global scale.  They don’t want to be locked out of markets serving China, the Middle East and India, which represent vast new student populations they can suddenly reach effectively.  It is very early days yet for the MOOC movement and there are some particular issues that need to be addressed including the revenue model, accreditation, certification/degree granting, cheating and security.  But since this movement, as we know it now, is less than 24 months old, some latitude is due in addressing what don’t appear to be insurmountable problems.

Page 35 – Your new customer experience
Adoption of all or some of the elements of the publishing platform approach result a more comprehensive experience for your customers. When generated from a clear understanding of the needs and requirements of your customer base your position as a publisher is solidified. Utility is maximized.  User stats support customer objectives and new product development.

Page 36 – What Happens Next?
In summary publishing is undergoing tremendous change but that’s really not the headline.  What is different is that our markets are different, customers may be competitors, partners and suppliers, cheap innovation can destroy a key market or channel, expensive innovation can fail and big beefy competitors can enter our traditional market without warning.   Some publishers are adapting but in my experience working with many types of publishers over the past five years I believe that there will be a very small cadre of successful publishers that will emerge from what we know of the traditional publishing market.  The remaining content producers – trade publishers, academic and education publishers, professional publishers etc. will be forced to align themselves with intermediaries in order to gain access to customers.  For the vast majority of content owners I don’t believe they will be able to compete for access and innovation like companies like Pearson, Random Penguin, McGraw-Hill and Google are able to.   Innovation around the fringes will continue but as these companies become successful they will either be bought by larger companies or their functionality or unique offering will be embedded into a platform offer.
In closing my comments from the speech I made earlier this year, I see the platform approach I’ve described as looking increasingly like an operating system for users and over time that’s what users will expect.  Supplying the equivalent of the print button in that environment will not represent a sustainable business model.  On the other hand supplying the breadth of functionality of the operating system won’t be attainable for most.
Thank you,

Tuesday, April 23, 2013

MediaWeek (V7, N16): Neil Gaiman at London BookFair, Amazon shorts, Libraries +More

Author Neil Gaiman addressed the crowds at London Book Fair last week and it may not have gone well.  "All I remember from the musicians union was that I got these yellow stickers" (YouTube)



From the New York Times on Amazon singles.

Besides luring luminaries like Ms. Orlean, Mr. Blum has tried to maintain the brand’s prestige by tightly limiting the number of offerings. Although the digital bookshelf is infinite, Kindle has posted only 345 Singles since its inception in January 2011, according to the company’s figures. (As of March 20, the company says, about 28 percent of the works have sold more than 10,000 copies, and nearly 8 percent have sold over 50,000 copies.)
Evan Ratliff, chief executive and co-founder of Atavist, said one thing his company likes about Singles is that it doesn’t accept every submission. “They actually make a concerted effort to find something great,” he added. “While we might disagree on the specifics of what that is, our overall sensibilities are aligned.”
But while remaining choosy, Mr. Blum takes a special pride in nurturing undiscovered authors. A favorite is Mishka Shubaly, a musician and recovered alcoholic who under Mr. Blum’s tutelage has written three best-selling memoirs on Kindle Singles.
Interesting short article on how a small libary consortia is battling declining budgets and circulation: (NJ)
The township library has launched a smart-phone and tablet application that enables users to get into the electronic catalog, renew borrowed books and place holds on other books. It also connects them to New Jersey’s digital library, where they borrow e-books and scan bookstore ISBN codes to see if Wayne’s collection carries the book before they decide to buy it. The Bergen County Cooperative Library System plans to release a similar app this summer.
"The number of smart-phone users is constantly going up," said Robert White, director of the consortium of 73 local libraries in Bergen and Hudson counties. "We have to do something to meet their needs."
 From twitter:
"Although many other U.S. newspapers have shrunk, the Philadelphia Inquirer has suffered more..."
James Joyce's Leopold gets his own book for Bloomsday
In sports, Manchester United pick up their 20th title with a month to spare Guardian

Friday, April 19, 2013

Bangkok 1968: Emerald Buddha


This would have been one of our first visits to see the sights after we arrived in Bangkok in 1968.  That's my brother and I on the plinth.  Interesting to see more Thai's in the picture than white tourists.  That isn't the case today.


Check out my book on Blurb in print and iPad versions.

If you want to make your own here's a link for $20 off your first book.

Wednesday, April 17, 2013

Follett acquires higher ed tech firm BetterKnow

Is the announced acquisition of BetterKnow a sign of innovation in the Follett higher education group? Under new CEO Mary Lee Schneider the company has made few announcements since she moved from the board to the CEO role but this could be an indication that Follett is committed to investing in new technology, services and business models to support their position in the higher ed market.

From the press release:
BetterKnow's products, combined with Follett's footprint on more than 1,000 college and university campuses in North America, will provide instructors and students broader, more affordable access to course materials.

Instructors can identify course materials from a wide variety of sources, including traditional textbooks, digital materials, videos and even open source content. Instructors will be able to read reviews, make their adoptions and collaborate with their peers teaching the same subject across institutions all in one place.

Students can go to one place to find and purchase the specific course materials required for their classes. They can compare prices across a variety of content formats and channels, and can choose their preferred option for delivery, either digitally or physically. When done in conjunction with an existing on-campus location, Follett can coordinate purchases with the student's Financial Aid account.

"Providing instructors and students with the tools they need to identify, access and acquire a broad variety of relevant course materials is critical to students' success," said Mary Lee Schneider , President and CEO, Follett Corporation . "Follett's integrated solution will create a simpler, more affordable way to deliver content in both digital and physical formats."

The BetterKnow acquisition will also directly support Follett's ground breaking includED® program, which positions institutions to improve student outcomes by providing course materials as part of tuition or fees. The program, which has been successfully piloted and is ready for rapid expansion this spring, is designed to ensure students can conveniently obtain all of their required course materials.

"BetterKnow's technology will help us more efficiently integrate access to content with Student Information Systems at our partner schools," said Tom Christopher , President of Follett Higher Education Group. "This will help us to further grow our includED program, which ensures every student starts the first day of class with access to the same materials, providing a quick start to their coursework that we believe leads to better class engagement and achievement."

"The products we've designed and built will dramatically accelerate the use of digital course materials as we are able to eliminate key barriers to use," said Isaac Segal , Founder and CEO of BetterKnow. "Our Discovery service will enable faculty to more easily sort through and choose between a myriad of course material options available to them, ensuring that the best material can be found and utilized to meet pedagogical goals. Follett has a deep and direct reach into higher education, enabling us to quickly bring these solutions directly to campuses."


Tech Therapy: Publishers Explain costs of Journal Publishing

From the Chronicle of Higher Ed a 20 minute interview with Fred Dylla, executive director at the American Institute of Physics, and Brian D. Scanlan, president of Thieme Publishers on the costs of publishing journals.

LINK to the article
Academic journals don’t happen by magic, and even online editions are expensive to produce in ways that scholars may not realize. That’s the argument by two scholarly publishers,  The two give their response to comments by our guest from last month’s show, a scholar who argued that in an online world journals should publish scholarly articles free online.

Download this recording as an MP3 file, or subscribe to Tech Therapy on iTunes.

Monday, April 15, 2013

MediaWeek (V7, N15): Digital Minds, Mendeley, Cal State Edx, Le Carre, + More

Fun to experiment - View this in Flipboard: http://flip.it/GoiH1

From the digital minds pre-conference at London Book Fair over the weekend this summary from The Bookseller:
Author Neil Gaiman, in a wide-ranging and complex talk, said people in the book business needed to become more like 'dandelions', experimenting by spreading numerous seeds around and accepting that most would fail. "The model for tomorrow is try everything, make mistakes, fail, fail better."
Gaiman took his analogies back to prehistoric days saying that print books could be like sharks, an animal that evolution has never bettered, but that there were still some dinosaurs in the business, for whom digital could be the end. "Books (some) may be sharks", but "home libraries" and "encyclopedias" were not, with both displaced by the web and portable reading devices. He said he recognised that the e-book was here when he daughter started reading off an early version of the Kindle on a trip to Hungary where printed English-language books were not available. For older readers he said the ability to increase font-size was the "killer app".
Gaiman said we were moving from a world where gatekeepers were necessary, to one where guides were essential. Gaiman said he would "sign anything", and said discoverability was best achieved not through a commercial transaction. "We don't normally find the people we love most by buying them, we discover them." Gaiman said he never wanted to go "to war" over this, instead he promoted "word of mouth".
From The New Yorker a view on the Mendeley/Elsevier tie up:
Elsevier has two reasons to buy Mendeley. One is to squash it—to destroy or coöpt an open-science icon that threatens its business model. Many critics fear that’s the case. The other reason is to possess the aggregated data that Mendeley’s users generate with all of their searching and sharing. Mendeley is still growing, with two million three hundred thousand users sifting through over a hundred million references. Their use patterns reveal who is reading what, which papers are popular, what lines of research are surging, which disciplines and journals are crucial, and a lot of other extremely valuable information.
No one has that kind of data at the scale of Mendeley. Mendeley had been selling access to segments of that data to publishers and other institutions, including Elsevier, as part of its business model. Now Elsevier owns all of that data. But if it wants users to continue generating streams of data, the company will have to play nice, which leaves it with something like the Facebook model: create software and a huge social network in which people share information that it can profitably harvest, and be just conciliatory enough about privacy, anyway, to repel fewer people than it attracts.
And Salon thinks about the data:
One common link is obvious: powerlessness in the face of corporate greed. But there’s another, slightly more subtle connection. When we use online services to gather together and share information, whether it be about our favorite romance novels, or most useful sets of bibliographic citations, we create persistent and accessible agglomerations of data. The more popular such services become, the more valuable that data becomes, and sooner or later, a big fish is going to come around and gobble it up. We personally may have never intended to sell out, but together we managed to create something that was bound to be sold. Inevitably, that data will be used to target us.

Techcrunch reports that Cal State is aggressively expanding their MOOC style offerings:
It appears that San Jose edX course is experiencing results similar to when universities switch from boring old lecture-style teaching, to a more interactive form. For instance, one University of California, Los Angeles biochemistry class experiment found a roughly 18% pass rate boost when it ditched lectures [PDF].
But, one-off experiments can often seem much more promising than reality, once they are brought to scale. When new-age pilots are broadened to environments with less-than-enthusiastic teachers and students, things can fall apart.
In the Guardian John LeCarre speaks about the genesis of The Spy Who Came in from the Cold but thinking who Leamas may have been in today's world:
The merit of The Spy Who Came in from the Cold, then – or its offence, depending where you stood – was not that it was authentic, but that it was credible. The bad dream turned out to be one that a lot of people in the world were sharing, since it asked the same old question that we are asking ourselves 50 years later: how far can we go in the rightful defence of our western values, without abandoning them along the way? My fictional chief of the British Service – I called him Control – had no doubt of the answer:
"I mean, you can't be less ruthless than the opposition simply because your government's policy is benevolent, can you now?"
Today, the same man, with better teeth and hair and a much smarter suit, can be heard explaining away the catastrophic illegal war in Iraq, or justifying medieval torture techniques as the preferred means of interrogation in the 21st century, or defending the inalienable right of closet psychopaths to bear semi-automatic weapons, and the use of unmanned drones as a risk-free method of assassinating one's perceived enemies and anybody who has the bad luck to be standing near them. Or, as a loyal servant of his corporation, assuring us that smoking is harmless to the health of the third world, and great banks are there to serve the public.
From my Twitter feed:
Publishers May Pay To Preserve Saturday Delivery
Google Death: A Tool to Take Care of Your Gmail When You're Gone - Rebecca J. Rosen - The Atlantic  
Massive Volunteer Collective Proofreads 25,000 Public-Domain Books  
BBC News - 'Pompeii of north' being unearthed in London  
MOOCs and Libraries: Introduction,by Merrilee Proffitt /HangingTogether

Friday, April 12, 2013

London Calling - Covent Garden 1993


It was dusk and getting dark and I couldn't hold the camera still enough.  The busker (and his mates - one with a double base) is captured in full action as a result of camera shake but it works.

In those days children, the American mall atmosphere of today's Covent Garden was but a wishful hope of some government functionary or two.

Check out my book on Blurb in print and iPad versions.

If you want to make your own here's a link for $20 off your first book.

Thursday, April 11, 2013

Croudsourcing Investments in Books: It will happen.

Eric Hellman over at the eponymously named Go To Hellman has an interesting idea that chips away at one of the last foundations of big publishing; the 'investment banking' attribute that big publishing brings to the industry.  Here's a snip from his blog post this week:
There's nothing intrinsic about crowd-funding that restricts this sort of fund-raising to unknown authors looking for a first advance. The JOBS act restricts the amount raised from "unqualified investors" to $1,000,000, so the really big name authors would have to tap the "qualified investor" funding market. (An individual with more than a million dollars in assets excluding home and vehicles is considered "qualified")

Once equity crowd-funding becomes established for books (and it WILL happen!), incumbent publishing houses will have lost, at a stroke, their oligopoly on books as investment vehicles. Already, publishers are outsourcing their design, editorial, production, distribution and sales functions; providing capital is their last bastion of essential function. They will have to participate in the new markets or they will dissipate into irrelevancy.
Read the whole thing.

Wednesday, April 10, 2013

OCLC's MOOC and Libraries Event Videos

From OCLC a selection of links to some of the sessions at last months Washington meeting on MOOCs and libraries:

MOOCs and Libraries event videos now available

The “MOOCs and Libraries: Massive Opportunity or Overwhelming Challenge?” event took place 18–19 March at the University of Pennsylvania and was broadcast live online. Hosted by OCLC Research and University of Pennsylvania Libraries, the event featured thoughtful and provocative presentations about how libraries are already getting involved with MOOCs, and engaged attendees in discussions about strategic opportunities and challenges going forward. More than 500 people participated in this event: 125 attended in person and more than 400 attended remotely online.
Links to the 11 individual videos and a MOOCs and Libraries video playlist that comprises all of these videos are available on the MOOCs and Libraries event page and on the OCLC Research YouTube Channel. Links to the presenters’ slides, the next steps document and the #mooclib archived tweets from this event also are available on the MOOCs and Libraries event page. Look to the OCLC Research blog, HangingTogether, for a short series of postings that recap presentation highlights and summarize outcomes from this event.

Sunday, April 07, 2013

MediaWeek (V7, N14): Window Cleaners, Museum Stores, Goodreads, Media News + More

Confessions of a window cleaner now back in print and coming from Harpercollins. (Independent):
While the films quickly ran out of steam, the books that inspired them didn't. Written by a former advertising executive called Christopher Wood under the pseudonym Timothy Lea, they ran to 19 titles, and Wood penned a further eight under the name of Rosie Dixon. They were overwhelmingly of their time (and there can be no better excuse), but it seems they are about to have their time again. Over the next 18 months, HarperCollins imprint The Friday Project will reissue all of them as e-books.
Good god, but why?
...
The cast of that film might well wish to quickly forget their involvement in it, much as many associated with the Confessions… films do today. Tony Booth, who played Timothy Lea's brother-in-law, declined an interview (much, you suspect, to his daughter Cherie Blair's relief); likewise Lynda Bellingham and Jill Gascoine, both presumably reluctant to revisit their early, naked screen appearances. Robin Askwith, for whom Confessions… proved a career high point, was prepared to give us an interview, but offered us just 20 minutes of his time in exchange for £500 – a figure greater than he would ever have received for cleaning windows.
There is, however, somebody happy to talk, for free – and that is the author himself. I meet Christopher Wood on a cold Thursday morning in a chic London restaurant. Now 77, Wood, elegant in his tweed jacket and wispy white beard, is terribly well spoken (he pronounces "off" as "orf"), and emits the kind of carefree air so common in older people and so envied by younger ones.
In the not really news category - The Observer notes the success of Museum stores that are popping up everywhere selling all kinds of things. (Observer):
Some of the more creative items appear to have been thought up in several eureka moments. St Paul's Cathedral harvested some of the rubble from recent refurbishments and set it into cufflinks. For £210 owners can now decorate their shirt cuffs with marble from the starburst under its famous dome.

Over at the National Theatre shop, the success of Warhorse – turned into a film directed by Steven Spielberg – led to the offer of a £2,500 half-size replica of the geese puppets used in the stage show, created by the puppeteers who made the originals.

At the Science Museum, shoppers can buy vases shaped as Thomas Edison's iconic light bulb, made from recycled incandescent bulbs. The museum has asked its inventor in residence, Mark Champkins, to create more unique items for it to sell.

However, perhaps leading the way in terms of creativity is the London Transport Museum in Covent Garden. To celebrate London Underground's 150th anniversary, the creative heads there have salvaged luggage racks from old Metropolitan line trains – selling them for £250.
At The Atlantic Jordan Weissmann opines why he thinks Goodreads is so valuable to Amazon.
So Amazon has just bought the ecosystem where many of America's most influential readers choose their books. How exactly they'll use it isn't entirely clear yet. Some have suggested they'll integrate Goodreads into the Kindle experience. Others think that, given the problems Amazon has had with writers buying friendly reviews, they might use the site as an a big cache of trustworthy opinions. As David Vinjamuri put it at Forbes, "Goodreads offers Amazon the ability to transmit the recommendations of prolific readers to the average reader." In any event, there's plenty of value for Amazon to unlock. Assuming, of course, they don't do anything to muck up their new purchase.
The Economist as a quick look at news organizations and concludes:
Where is the good news? Last year local TV stations, especially those in swing states like Florida and Ohio, got a welcome boost from the $3 billion spent on TV advertising during the election. And newspapers are now starting in large numbers to demand payment for their digital content. Pew reckons that around a third of America’s 1,380 dailies have started (or will soon launch) paywalls, inspired by the success of the New York Times, where 640,000 subscribers get the digital edition and circulation now accounts for a larger portion of revenues than advertising.

Boosting circulation revenue will help stem losses from print advertising, since it has become clear that digital advertising will not be enough. For every $16 lost in print advertising last year, newspapers made only around $1 from digital ads. The bulk of the $37.3 billion spent on digital advertising in 2012 went to five firms: Google, Yahoo, Facebook, Microsoft and AOL. Not much Gandhian equality there.
From my Twitter Feed this week.

Scholarly Publishing: Project Muse and Highwire Press Announce Partnership PressRelease
In digital age, library finds difficulty attaching numbers to its value. Topeka CapitalJournal (They buried the lead).
CourseSmart Analytics Is a Bad idea | Inside Higher Ed InsideHigherEd
Amazon Takes on Dropbox With New Desktop File Syncing Wired
Rosetta Stone acquires Livemocha for $8.5m (Nick Summers/The Next Web) TNW
BBC News - Judge rules digital music cannot be sold 'second hand' BBC

Friday, April 05, 2013

Roof Top Gardens Midtown 1968


In the old days you used to be able to walk out onto these roof gardens as part of the tour of Rock Center - at least I assume so since I have a photo from this set of Mrs PND senior standing on the grass down there. Now you can get something of a view of them if you go to the top floor of SAKs which I did a few years ago but I would like to go out to one of these gardens just once.  I've guessed that this image was taken mid morning on a weekday and, assuming that, it is interesting to see how much less traffic there is both on the roads and on the sidewalks.

Check out my book on Blurb in print and iPad versions.

 If you want to make your own here's a link for $20 off your first book.


Thursday, April 04, 2013

Content Cashier

Buying content is way too cumbersome.  I don't mean the Amazon 1click buy but rather the individual article or chapter you might want to read.  We are seeing how video and audio (Netflix On Demand and iTunes for example) are morphing into single transaction type activities and this should happen for print.  Eliminating all impediments to the efficient sale or transaction of content should be the objective of any content owner yet with all the investment in online retail, publishing processes and efficient supply chains, the media industry has simply transferred the old models to the online world.  Outside of complete books, content is still very hard to transact on.

But there is a simple fix: I've long thought that content should carry with it a 'cash register' which would allow immediate purchase, rent or access (based on user rights).   I'll admit that metadata is not the industry's strong point but part of the reason metadata in media is generally so abysmal is that there is too much distance between the metadata owner and the transaction.  Tighten that space to where there's no difference and you'll see metadata improve fast.

Let's say a publisher wants to make a book chapter salable.  "Content Cashier" (TM pending) will provide the prospective buyer with a price for the type of transaction they want such as buy, rent, etc.  If they have a profile with "Content Cashier" this transaction will occur in the background with a simple acknowledgement (yes/no) that the customer wants to continue.  If not, the user will be able to pay via some other method (Paypal, Amazon) in less than 60seconds.

Publishers would attach their terms of use and pricing within a very simple framework - little different than if you were in a physical bookstore.  The bookstore experience assumes many things notably if you buy a book you are going to transact at the register and walk out with it.  "Content Cashier" will also take certain assumptions for granted about the transaction and the customer to simplify the pricing and the transaction itself.  In our model the publisher will pick up more than 95% of the value of the transaction (we haven't decided yet), but there is no reason why standard retailer discounts, commissions and other fees should apply when we've eliminated all the inefficiencies in the supply chain to shorten the gap between content and the buyer.

Other tools will allow a publisher to create collections and retail 'pop-up' storefronts that maximize their opportunities to reach out directly to customers.  The real benefit however will be that "Content Cashier" travels with the content so that at any time - meaning when the content is out of the control of the publisher - a transaction can be executed.  Pass a link via email, find the article in a database, or list the item on a course outline or LMS, no problem; "Content Cashier" will let the user pay for that content instantly.  When this type of instant transaction can be facilitated at the point of need publishers will begin to improve their metadata, simplify their pricing and engage in experiments with their customers to maximize their revenues.

Providing "Content Cashier" information on your content is likely to enable new business opportunities for new market entrants who want to use content as a component of a product with many more unique additional features and services they have developed.  Enabling these new models becomes far easier when a set of simple terms and conditions travels along with the content.  There are any number of new platforms, store ideas, collaborations, services and tools and these increase by the day.  Many are spurious, some are stupid but occasionally a really new idea will come along.  Since many of these new ideas fight for your attention and time why not make it easy for them, stop the guessing game and start to manage your retail opportunities in at proactive way.   That's what "Content Cashier" is all about.