Jul

8

How big is the eBook?

Filed Under Blog, eBook, Education, eLearning, internet, mobile content, Publishing, social media, Uncategorized | Leave a Comment

Lets start with a complaint. I seem to be the only citizen of the UK who has not received a letter from the Police saying that my phone might have been hacked by Murdoch’s News International newspapers. This is at once humiliating and ungrateful. Only recently I sent Rupert a birthday card (https://www.davidworlock.com/2011/03/birthday-greetings-rm/) I wonder if compensation will be offered to the bruised egos of those of us whose voicemail did not assuage the ferocious appetites of the newshounds at the now defunct News of the Screws. But I know that if I had the Tycoon’s dollar in my grasp I should be forced to pay it over to the benefit of the 200 wholly innocent computer operators, secretaries and cleaners who have lost their jobs in this debacle, and will be unemployed until Rupert gets the Sunday Sun launched later in the year.

So that is the topic that I do not choose to talk about. And I would have liked to talk about Facebook: everything in the social network devolves to video is a theory I have held for a long time. The Skype-Facebook alliance brings Microsoft back into play, but Google+, the social network, while it has few takers, has group video. The manifest destiny of social networks is video chat, and that is a subject for another day. Meanwhile, Facebook has seen its first net user declines. Watch this space.

Still with me? The most important issue of the week was definitely getting a copy of a new report on Market Sizing and forecasts for eBooks. I was delighted to see that this came from my erstwhile friends and colleagues at Outsell, not least because they have filled a real gap and we are all going to be grateful to them. As they would expect, I could argue with the forecasts, but so could most of us: the important thing is to have a forecast, based on historical data, which can be the focus of debate going forward. Outsell have decided to divide the market to be measured into three – consumer, educational and professional. This was very wise. They have also made the very first attempt that I have seen to get global estimates – Europe, Asia-Pacific and the USA will all be markedly different in their development in this area. It is comforting, after so many attempts at global trend analysis (thinly disguised US forecasting globally extrapolated) to see genuine attempts to understand players like Kodansha and fit them into the grid. The future is manga as well as Stephanie Meyer. So, inspired by these efforts, let me add a couple of thoughts on top:

The report notes that many publishers feel happy with eBooks. They should be deeply disturbed, in my view. The eBook is a transitory phase, and anyone complacent enough to believe that it “solves” any of the underlying issues of movement to a networked, digital marketplace needs a strong cup of tea and a good talking to, as my mother would have said. It is already clear that the only thing that these three markets examined by Outsell have in common is that they all define the word “book” in “eBook” very differently. “Book” is the packaging word of the print world: calling something an “eBook” does not mean that publishers can regard it as a format environment in the same way. In current attitudes to ebooks, especially in those devoted to ePub3 who point to the newly announced standard as a breakthrough in multimedia publishing, there remains the hope that eBooks can become an extension of businesses which are primarily print-based and wish to see change at their own pace. The problem is that neither customers or self-publishers, or custom course content producers or anyone else, is going to wait for them.

In the meanwhile, we all need to know where we are on the change graph, and then we can begin to adjust our own strategies as we guage how fast the water is running. Outsell have done us all a real service in getting all the data together: now we need to acquire it and begin the internal argument from here.

Worldwide e-Books: Market Size and Forecast Report, 2009-2013 (June 30, 2011) (www.outsellinc.com)

Jun

30

Reach for the Sky

Filed Under B2B, Blog, Financial services, Industry Analysis, internet, mobile content, news media, Publishing, Reed Elsevier, Workflow | Leave a Comment

Ye Gods! This industry is changing so fast that it is almost impossible to leave the keyboard unattended for a moment. No sooner had I entered a plea in mitigation for the survival of the Guardian than I saw that Ascend (http://www.ascendworldwide.com/), a company that I have been following closely for many years, had been bought by Reed Elsevier, and that the SBB Group had been bought by McGraw-Hill. What is this? Strategic purchasing in B2B? Has the world turned upside down (or back up in the direction it was before 2007)?

No, my friends, there is no madness here, or if there is it lies only in the multiples paid. What we are seeing is a continuation of the trend we saw with Thomson Reuters: refocus on broad verticals, buy data, go for the workflow, forsake advertising, consolidate to the point of duopoly and seek lock-in through adding value in essential process requirements for end users. Result of success: increased productivity, enhanced decision making and better and less costly compliance.

So lets look at our two acquisitions. Neither is huge, but Ascend would be much the largest. This company was formerly the database built by an aircraft industry loss adjuster, and Lloyds Development Capital saw the opportunity to prize them apart and create, under a very effective new management team led by Gehan Talwatte (D&B, Hoovers) an industry database service for the commercial aircraft lease-hire market. Still sound a bit specialized? Well, over 90% of aircraft in the skies are leased, and due diligence demands that the market has the ability to know the flying life of every part in every plane in order to establish valuations. Ascend data feeds the workflow of pricing and term decisions around those transactions, and Gehan and his team have been tireless in creating ways, through technology interfaces and, of course, the release of APIs, to ease their content into the core workflow of a very valuable market within the aircraft industry. (Note for future use – the collection of data in the first instance was for a different purpose than the eventually successful implementation. This is very often the case, but usually ignored by managers who argue that markets for this or that dataset are too narrow to exploit. They are almost invariably wrong).

So then Reed bought this asset for RBI. This in itself deserves comment. Having sold Cahners and removed itself effectively (construction is the great exception) from US B2B, Reed Elsevier are left with the more successful UK and mainland Europe B2B assets. There, for many years, they have been concentrating on a few vertical markets and have closed or digitalized much of their advertising dependent output. In data services with transactional workflow implications, their ICIS service (http://www.icis.com/home/default.aspx) in industrial chemicals pricing is a world leader. And other fields of vertical specialization include property (EGI remains the beacon for “community”, organizing an interactive grouping of property developers, vendors, real estate agents, lawyers and surveyors long before community was a key word in the information industry lexicon).They are also the UK’s leading commercial jobs mart (TotalJobs) and have a big share in the horizontal market for employment law compliance (XpertHR), and it must be supposed that one day these areas too will recover. Finally, they put all the data derived from extensive holdings in the aircraft industry magazine world into FlightGlobal (www.flightglobal.com). Now that unit has a sharp edge, a raft of data for potential re-use and a real workflow integration exemplar, since it has Ascend. The execution is everything, but this is a smart buy for Mark Kelsey, Jim Muttram and their team.

And a just-in-time purchase as well. If this one had gone to IHS (Janes) or to McGraw- Hill then the balance of power in the aviation and avionics vertical would have begun to change.There may only be room for two of these three. The decision to buy is remarkable since most analysts are still working on a scenario where Reed Elsevier exits RBI completely, and some believe that this applies to Reed Expo as well. In the absence of white smoke from Trafalgar Square, it is hard to tell, but clearly an argument that Reed had to make this purchase in a very competitive strategics market has prevailed, and it could be that alongside it an argument for reducing the number of verticals but intensifying the growth by acquisition is also being accepted.

Certainly these events have impacts for McGraw-Hill. How many verticals can they be in? SBB Group is a UK start-up of 2001 in the steel pricing and analytics business. It has indexation ( www.thesteelindex.com) and pricing analysis, and sells both to producers/wholesalers/stockholders and to commodity analysts and traders. It thus supports the thrust at Platts, so long pre-eminent in oil and petrochemicals (but now having to suffer the indignity of seeing smaller upstarts like Argus Media nibble away at some of its prime positions) Other McGraw verticals also want to get to this workflow /embedded service concept. McGraw Construction Network was a good start in moving F W Dodge and Sweets away from look-up and into workflow (maybe a way of stopping current lawsuits would be to merge this with Reed’s isolated US construction efforts – now that would be the workflow of the industry!) McGraw’s major interests in aviation and avionics will undoubtedly feel the loss of Ascend. As indicated above, Reed have just evened up a three way struggle in this vertical.

So lets watch for more examples of this type as B2B changes its nature, turns into data and workflow, and the players who want to stay in the game in big verticals have to consolidate in order to become one of the 2-3 core services in the sector. And lets keep pondering on the nature of workflow, a world where all the information required to make a decision has to be gathered in one place and you can only usually deploy one solution at one time. As well as consolidation, I see data sharing and service collaboration where one powerful player decides with another to allow X to do the industry job, while Y concentrates on the financial markets and analysts. Except that the financial services players are playing in that  latter workflow (Bloomberg v Reuters in carbon pricing is the classic). Going to be very competitive, these markets!

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