Aug
8
After You, Mr Dickens…
Filed Under Blog, eBook, eLearning, mobile content, Publishing, social media, Uncategorized | 3 Comments
In the midst of the Olympiad, it is hard to remember that we should be celebrating two centuries since the birth of Charles Dickens in 1812. My private undertaking was to read Michael Slater’s literary biography of the great man (Yale, 2009), and I am now at the midpoint of its massive 650 pages of densely packed information. It is a fascinating but heavy tome, so when I fell asleep with it on my lap last evening, it is hardly surprizing that, in reverie, I encountered the great man himself and was able to pose one or two questions that have been troubling me. I found him alert, right up to date (though his use of slang owes more these days, he tells me, to TV soap operas than the streets of London’s East End) and full of his typical energy in tackling modern problems.
“Future of publishing, you say? Well, future of literature, and self -education is one thing, but if the future of publishing means the future prosperity of publishers, then I cannot link the two. My publishers were either printers or booksellers, and when they were not trying to make off with my livelihood they were trying to cheat each other. I never had a good one after Chapman and Hall, and even the best got greedy.”
“That’s why this technology stuff is so fascinating. Restores the balance. Now once again authors and readers are powerful and intermediaries are fighting for their lives – capital good stuff. If only I had been able to employ your tools. The eBook is brilliant for me – here was the method I needed to serialize my stuff properly. If I was doing it today, I would publish on Amazon or AppStore in 20 monthly parts for 99p per part, then collect the whole lot at the end into a single volume for £17.50. Then I would read each part myself on your splendid You Tube thingy, then do the album from that. Then the illustrated text – my dear Phiz could just about have managed animations – so in the final, de luxe, Christmas edition we could have text, animation and voice all integrated. And, of course, I would have been a natural as a film producer, so the ultimate collection, as well as my brilliant readings – almost killed me, dear boy, those did – would have film versions as well. All those price points, all those entry levels, all those royalty cheques! But, recall this: serialization is the secret to the build – and to building an audience which will discuss your work and constantly sell it to each other. We got over 70,000 on the Old Curiosity Shop serialization – my breakthrough to an audience that I could address time and again, and hold stable with my magazines, like Household Words (yes, we shall live in their mouths like Household Words – does no one perform Henry V these days?)”.
“So what is going wrong? Simply, dear boy, you have no genious! Everything is either controlled by publishers, who always want to hold onto the past and ride it into the future, or by distributors. They are the death of innovation – as soon as they have innovated they want to stop the business model merry-g0-round and milk the wooden animals on it. I want to see authors blazing this new trail. Cory Doctorow? Never heard of him. Was he one of those damn Yankees who were so rude to me in ’41? Go out and build audience in these digital networks, and then watch the world come to your door. Look at me! Don’t wait for publishers to move into the nineteenth century – that’s a joke, a jeu d’esprit, but you know what I mean. Before I came along there was no real serialization. Literature was a three decker novel. I changed all that. People demanding to read in railway trains changed all that. Now you have smartphones and people in subways. Its a challenge to genious and you are failing it. Fifty Shades? Yes, I was reading it aloud to poor Wilkie Collins only the other night. Boring, we thought. Unrelated to what goes on in your society.”
“What goes on in your society? My dear child, you try my patience since you have less natural intelligence than Jo the crossing sweeper. Only this morning I read in the dear old Manchester Guardian (and they said my Liberal Daily News would not last!) that a boy near London had spent a year living in a tent without an income because he “fell through the net” between different local government offices. 44% of my modern Londoners do not have English as a first language. Your care homes are a scandal of violence and bullying of subnormal young people and intimidation and neglect of the powerless elderly. And this is what a responsible, well-paid, allegedly trained “professional, caring” society does to them or allows others to do to them. Dotheboys Hall? You have so much more to write about than I did! And my government did the Great Exhibition and yours is doing the Olympics. Bread and circuses, dear boy”.
“Whats that? I’m a bit deaf on this side. Oh, you think people do not flock to Literature because they will get their intellectual property ripped off? (Interesting expression – mind if I make a note?). Look, this whole Copyright thing is a farce. Please, please start again somewhere else. Perhaps with an International Licensing Convention. Copyright is the shibboleth of those who own rights and not property. It was created in Queen Anne’s time to stop booksellers and printers from ripping each other off. In my time, the heinously criminal American publishers lobbied their government to maintain the fact that they had never signed the international copyright conventions. As a result I had a huge audience in the USA by 1841, but never had a penny in royalties from it. My solution? Do my public readings there – then they had to pay to get through the door to see me. But when I spoke in the USA about this I was always told, by those toads of journalists, that I “besmirched the face of literature by mentioning a pecuniary interest!” And I had similar problems with plays – as my serializations came to an end of story, plays would start appearing in the West End and Broadway using my characters – and second guessing the endings! So I used to alter the endings… until I got wise and did a play collaboration with one company. But now, dear boy, you need to wake up….”
And, just then, I did…
Jul
30
Good Bank, Bad Bank, Big Bank, Sad Bank
Filed Under B2B, Big Data, Blog, eBook, Education, eLearning, Financial services, healthcare, Industry Analysis, internet, news media, online advertising, Pearson, Publishing, Search, semantic web, STM, Uncategorized, Workflow | Leave a Comment
From Olympic Exile on the splendid South Shore of Nova Scotia, I can observe that the banking crisis continues apace, and that the original Swedish solution – put all the smelly bits into a special container called a Bad Bank and cut it free from the Mother Ship – still holds great appeal. I can also see that the financial market analyst demand to cut media companies up into “high growth, strong margins” companies and “low growth, declining margin” companies also has great appeal. We have seen it with McGraw-Hill and now with News International. The equity market analyst’s view (and media markets are almost always at their most dangerous when those who lead companies feel forced to follow the views of those ultimate exemplars of power without responsibility – or experience) seems to be at the moment that the assets which have responded least well to the digital revolution, or have been slowest to react, should be cordoned off and cut free. Very strange: I thought the whole idea of “portfolio” in media ownership was that assets developed at different speeds, and the fast growth ones thus gave “cover” – time and capital – to allow low growth assets to become fast growth again – perhaps with the help of judicious bolt – on acquisition on the way.
And then there is the question of cycles. Some of us apparently work in mini-cycles – the turn of markets within an 18 month period according to an analyst friend – while others are “macro-cycle minded”, which is where I am apparently involved. So if I thought that the reason for McGrawHill to hold onto its Education division was that education, alongside Healthcare, is the most enduring long term growth market we have, and that the portfolio duty of Standard and Poor’s was to enable McGraw’s education unit to get back on its feet, challenge Pearson’s leadership and buy the right catalytic add-on, then I was clearly wrong. Yet it seems to me clear that the future of rating agencies is quite as murky, from both a regulatory as well as a digital standpoint, as any other market. And is McGraw’s B2B, despite some distinguished work, really in the forefront of digital services and solutions in its verticals? Yet these are Good Bank assets, and Education is Bad Bank.
I could write the same about News Corp, television and newspapers. I am certain that no broadcast media have really absorbed the meaning of a networked society, and this is as true of the world of TV stations and cable companies as it is true of newspapers. Of course, one way around the problem is to sell while the going is good, as DMGT so signally failed to do in 2008 when they refused an offer of £1 billion for Northcliffe (regional press), an asset worth around £250m today. Sentiment forbade such a move as it once did at News Corp, so are players like DMGT destined to split to please investors? Apart from my respect for the bravery and ability to change involved in creating new B2B orientated DMGT out of old newspaper DMGT. who is to say that here no digital local manifestation can be created which will not replace traditional local newspapers? And how valuable, since they have them, would those local brands and franchises become in the new local? Especially at helping bits of B2B2C in markets like property reach ultimate consumers.
And where does the splitting end? The arguments that apply here apply equally to the Guardian Media Group, and are complicated by the fact that one investment made to give cover for the newspapers, EMAP, has faded faster than the newspapers themselves. Hopefully selling its half share of this and Autotrader will adjust the losses, and digital revenues (now up to £14.7 m and growing by 26% this year) will do the rest. But here we hit another problem: digital businesses may be more profitable, but they are also smaller. Digital newspaper ad revenue (Mail Online now stands at a forecast of £327m, with a target of £45 m in 2013) models are small, as are paywall models (Times Online now reaches £27m pa after a price hike) And the story of digital books is “less revenue, more margin, cannibalising customers to create a slightly smaller, slightly more profitable company”. What happens when we finish that short cycle?
Maybe the answer to the scale problem is that scale is becoming less important anyway. In a digital world if you have 50% of the workflow and solutions business in agriculture, why should you be in the same group as a content provider to the oil industry? Certainly our current ideas of scale came directly from the print world – you needed to be big enough to finance print runs that took, a day, a week or a year to sell. The cash flow model demanded scale. This is not so today, though I can well imagine a world where deploying common (and very expensive) technologies and having sufficient internal know-how to do so becomes a scale argument. Few B2B players “re-platforming” these days can be doing so, at quite a modest scale, at less than $1.5 m, even if their content is already in good XML order. Larger players face bigger bills, and these will be ongoing as we all go semantic web and Big Data. Then again you may need to be big to finance this as well as investing in collaboration with third parties – content-sharing, delivery mechanism-sharing, solution-sharing. And you may need to be big and diversified to fight off the next round of investors in this sector – the enterprize software vendors who will want to add your B2B solutions to their architecture (or maybe you will need to be big enough to attract them: it can be hard to tell).
So settle back for summer and await the next wave of splits rumours. Back to splitting up Informa? EMAP is already, like Gaul, divided into three parts and ready for resale. Pearson should certainly, in the analysts view, sell Penguin and the FT (despite the fact that they are appreciating nicely now, and they will only be needed as a votive offering to the markets when their sale can finance the next big education push/acquisition). Surely Wolters Kluwer should be subject to this one too – financial analysts sought the sale of its education and its academic publishing assets, and, having succeeded, still hunger for the news that Health is being sold away from law and tax.
Or maybe we should say that it is customer markets that change the size and scale of assets, not investment analysts who have a key interest in the outcomes that they recommend. Maybe we would get richer listening to our customers than listening to these back seat drivers?
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