ABA’s Vlahos offers survival advice to Western booksellers
In a session entitled “Surviving Tough Times” at the Mountains & Plains Independent Booksellers Association (MPIBA) annual trade show, Len Vlahos, chief operating officer of the American Booksellers Association, offered practical advice about how to reduce costs and increase sales - such as renegotiating leases, cutting staff hours and using part time employees more than full time employees.
Even skimping on bags saves money, Vlahos noted He said that instructing employees to shift from asking customers, “Would you like a bag?” to “Do you need a bag?” cuts bag use by 20 percent.
Attendees agreed with Vlahos that sales of regular-priced books are down, while sales of used, bargain and sale books are up.
One bookseller said that the suggested cost-cutting measures might be helpful, but added, “I fear that this is not going to be temporary, that this is the new normal.” Vlahos conceded, “If we’re defining a new normal, the business model of running a store that sells almost exclusively new books to customers is probably not sustainable.” (Source: Jenny Shank’s NewWest.net blog, 9-29-09)
Scholastic narrows first quarter loss
Book publisher Scholastic Corp. posted a narrower loss for its fiscal first (June-August) quarter, helped by improving educational technology sales to schools as well as children's books.
The company, which typically posts a loss during the period, lost $23 million, or 63 cents per share. That compares with a loss of $49 million, or $1.30 per share, a year ago.
Including results from discontinued operations, the company said its loss per share in the most recent quarter came to 68 cents per share, compared with $1.13 a year earlier. Sales climbed 14 percent to $315.6 million.
"Scholastic's strong first quarter puts the company firmly on plan to achieve significantly higher earnings and free cash flow this fiscal year," Chief Executive Richard Robinson said in a statement.
Revenue for the company's educational publishing division jumped 29 percent to $148.7 million. Children's book publishing revenue grew 25 percent to $76.2 million, led by a 25 percent increase in the trade segment which benefitted from sales of the paperback edition of Harry Potter and the Deathly Hallows and the release of the fifth title in the 39 Clues series. The Hunger Games also continued to sell well. Sales through book clubs rose 46 percent, while book fair sales fell seven percent; the first quarter represents a small portion of revenue for clubs and fairs.
However, international sales dropped 10 percent to $75.6 million. Media, licensing and advertising revenue fell six percent to $15.1 million.
led by a 25 percent increase in the trade segment which benefitted from sales of the paperback edition of Harry Potter and the Deathly Hallows and the release of the fifth title in the 39 Clues series. The Hunger Games also continued to sell well. Sales through book clubs rose 46 percent, while book fair sales fell seven percent.
In educational publishing, revenue increased 29 percent, to $148.7 million, with sales of educational technology, including Scholastic’s READ 180 program, rising by $35 million as Federal stimulus money began finding its way to schools. Sales to classroom libraries was flat in the quarter.
The company is moving ahead with plans to restructure its U.K. division and said one-time costs associated with the reorganization will range from $7 to $10 million.
PW survey finds publishers in search of new business models
Just over 72 percent of publishers taking part in a survey on the impact of digitization on book publishing said the development of new business models, new multimedia products and effective marketing strategies are the biggest challenges facing publishers as they make the transition from print to digital.
The survey was conducted by the Frankfurt Book Fair and the German trade magazine Buchreport in cooperation with Publishers Weekly, and received responses from 840 publishers around the world.
What forms the new business models should take and how publishers will charge for content generated no consensus.
Charging readers a flat rate that would allow them access to all of a information provider’s online content similar to a traditional subscription model was favored by 25 percent of respondents, especially those from Europe. Paying for snippets of content through micropayments was favored by 23 percent, with that method backed the most in Great Britain and the U.S. The premium model, under which users would pay for selected online content, found support from 16 percent of respondents.
At present e-books are generating the most revenue, although publishers remain unsure on how to price those titles.
The survey found that the majority of publishers support pricing e-books below the price of print books, with only 19 percent saying e-books should be as expensive as the print book or more expensive. What the discount should be below the print price had a wide range of responses with the highest percentage, 30 percent, saying e-books should be priced at 30 percent off the print price.
Sixty percent of publishers said sales of digital products are expected to represent less than 10 percent of total revenue in 2009, although that is expected to change in the next two years, with 58 percent saying they believe that in 2011 digital sales will account for over 10 percent of revenue.
By 2018, about 50 percent of respondents said they believe more of their revenue will come from digital products than print.
The majority of responses came from Europe (74 percent), followed by the U.S. (11 percent) and Great Britain (four percent). Trade houses accounted for 32 percent of respondents, with information publishers second at 20 percent and educational publisher third at 10 percent. (Source: Jim Milliot, Publishers Weekly, Sept. 28, 2009)
Sony ramps up e-book self-publishing options
After watching Amazon make huge headway in the e-book self-publishing game with its Digital Text Platform, Sony is finally making a real push into this area with a new Publisher Portal and partnerships with self-publishing companies Smashwords and Author Solutions.
"New authors can select a self-publishing path and get their work published and for sale on Sony's eBook Store in as little as 10 days," Sony representatives said. "As Sony completes the conversion of its eBook store to the industry-standard EPUB format, Smashwords and Authors Solution will expand the offer to all existing Author Solutions and Smashwords authors to get their titles up on the Sony site."
Author Solutions, one of the larger vanity press companies, with several brands, offers a full suite of self-publishing services, most of which are fee-based. Start-up Smashwords is focused exclusively on e-book creation and sales, and it is free to use - you simply upload a Word file, make some tweaks to your formatting based on a style guide, and presto, you have an e-book.
According to Sony, Author Solutions and Smashwords will offer authors the option to publish content in the EPUB format, "the International Digital Publishing Forum's XML-based standard format for reflowable digital books and publications." Amazon, on the other hand, uses its proprietary e-book format.
Marketing books: what works and what doesn’t
According to Forbes, the market for direct-mail-sold books was four percent of overall wholesale book sales. Today, according to the same source, that market has shrunk to about 1.4 percent... Do celebrity endorsements help sell books? Yes indeed. Recent research has shown that celebrity endorsements can have a positive influence on the credibility, message recall, memory and likeability of a promotional piece as well as a positive influence on purchase intentions. One beta test in 2009 showed that celebrity-endorsed advertising prompted a 13.5 times greater conversion rate for viewers on the internet.
Eli and Peyton Manning boost Scholastic ClassroomsCare Challenge
There's a football/schoolmatch-up this fall and millions of kids across the U.S. will benefit
Top names in education and in football - Scholastic Inc. and Super Bowl MVPs Eli and Peyton Manning - are joining forces and inviting America's teachers and students, along with several key charity partners, to join them in bringing more than one million books to kids in need across the U.S. via Scholastic Book Clubs' ClassroomsCare program.
The ClassroomsCare program has been successful in distributing more than nine million books since 2001 to kids in need through charity partners like Reach Out and Read and Save the Children.
This year, Scholastic will also be coordinating with the Mannings' youth charities, including the Peyton Manning PeyBack Foundation and The Eli Manning Children's Clinics.
Scholastic will also be publishing a new picture book, Family Huddle, featuring America's most famous football family, the Mannings.
ClassroomsCare is an annual challenge to the one million classrooms that use Scholastic Book Clubs. Participating classes read 100 books, triggering a donation of books from Scholastic Book Clubs to ClassroomsCare's charity partners. The books are then donated throughout the year to kids in preschool to middle school who in many cases would not otherwise have books of their own.
Classrooms keep track of books read on posters and online, and then tell
Scholastic when they've finished. Any books kids read in the classroom, with their parents or on their own count toward the goal. Teachers also can use lesson plans and activities available at http://classroomscare.scholastic.com to incorporate this program into their curriculum.
More than one million classrooms have participated in ClassroomsCare since its founding in 2001, helping Scholastic Book Clubs to donate more than nine million books to kids.
The Google lawsuit – what’s it all about?
At issue is the right to scan and make available online millions of books, including out-of-print and in-the-public-domain works.
Most importantly, Google could digitize the so-called "orphan works" - books that are still copyrighted although the author is dead, the heirs are untraceable, or the publisher no longer exists and no one can find the clear holder of rights to the work.
Companies such as Microsoft, Yahoo and Amazon, but also consumer groups and professional associations, have filed complaints with the U.S. District Court opposing a settlement reached by Google with the Authors' Guild and the Association of American Publishers to create the Google Books Registry.
In October, Judge Denny Chin of the U.S. District Court for the Southern District of New York is set to review the settlement and hear both sides.
The agreement was the result of a lawsuit brought by authors and publishers in 2005 on Google's effort to scan millions of library books. Last October, Google proposed paying $125 million for copyright infringements, and its former foes turned into new friends.
Google began digitizing books in 2004. Google has now already digitized more than 10 million books, and the Google Books Search service boasts partnerships with some of the world's most renowned libraries, such as Harvard, Oxford, the New York Public Library and the Bavarian State Library in Germany.
As part of the $125 million agreement under review, Google would have the right to scan out-of-copyright and out-of-print books, or copyrighted works from cooperating authors and publishers within the United States.
The Open Book Alliance opposes the settlement. Co-founder Peter Brantley says that "with Google granted a monopoly to unclaimed works, it would exercise a monopoly over subscriptions for the most comprehensive collection of books available."
