Martha Stewart Explains It All For You

April 28, 2011

While reading the latest financials from Martha Stewart I realized that her template could be applied to most long-time publishing organizations today. Revenue up, profit down. The only thing unusual about Ms. Stewart’s story is the “revenue up” portion. More often I read “revenue down, profit down.” Digital widgets generally sell for less than their analog predecessors.

Digital ad sales at MS rose 55% (print advertising squeezed out a 2% increase). Unique website visitors were up 42%. Pageviews up 29%. The result? A net operating loss of 5% of publishing revenues (admittedly an improvement from 8% last year).

I’ll take a two-page spread, please

Charles Koppelman, Executive Chairman and Principal Executive Officer of Martha Stewart Living Omnimedia, offers an excellent stock phrase: “We believe the transformation of the company is beginning to take hold as we seek to broaden our portfolio…We feel we’re positioned to deliver profitable growth as we execute on our business plan in 2011 and beyond.” Good, no?

Meanwhile Jeff Jarvis has an excellent post this week called “Hard economic lessons for news.” He’s got rules, reality checks and more rules. And then something called “Opportunities.” If you’re in the newspaper business. you might want to take a Valium before reading it – you wont feel encouraged. Jeff talks only about the squishy stuff: “engagement,” “networks,” “value added,” “other revenue streams worth exploring” and “collaboration.” OK, there’s one notation on good old “infrastructure.”

Jeez, Jeff. I thought you were going to tell us about opportunities.

But, keep in mind, today Microsoft announced that it had a $726 million loss from online operations in Q3, staying on track to losing $3.5b (yep, billion) in the full fiscal year. Only Apple makes online look easy.

(Can’t resist: Yahoo previously demonstrated how to lose $3.5 billion in a single acquisition, Geocities.)

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Hated the Book. Loved the Kindle

April 25, 2011

From the “You Can’t Please all of the People all of the Time” department:

The book in question is the Booker Award-winning The Sea, by John Banville.

Most of the 142 customer reviews on Amazon are positive, but those who dislike the book are vocal. Among the negative headlines:

  • Dull as toothpaste
  • This won an award?
  • Exquisite languor
  • eh?
  • Most boring book I have ever tried to read
  • Conned by Booker Prize

From the “Loved the Book. Hated the Kindle” department:

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David Owns 3,500 Books

April 23, 2011

I was reading the bio of the David Lavin, the president & CEO of The Lavin Agency, a speakers bureau that represents some famous names, including the 400-Hour Workweek’s Timothy Ferriss, CNN’s Anderson Cooper and “Literary Legend” Margaret Atwood.

In his bio Lavin catalogs some impressive achievements. He was the youngest chess master in Canada and represented the country in two World Under-27 chess Olympics. He had a very successful career as a promoter, bringing such luminaries to Toronto as Peter Ustinov, Tom Wolfe, Jerzy Kosinski, Noam Chomsky, Hunter S. Thompson and the legendary triple bill of Abbie Hoffman, Timothy Leary, and Eldridge Cleaver.

And he owns 3,500 books.

What? Wait. Does that strike you as an odd claim? People have long boasted about their libraries. But I tried to translate it into the ebook era and it doesn’t parse.

Lavin actually writes that his 3rd-person self “has an ever-growing personal library of over 3,500 books.” Try adding “on his Kindle” or “on his iPad” to the phrase and say it slowly. It doesn’t sound right to me.

19 books on an iPad

Or as I’ve seen trumpeted elsewhere, Lavin could update the claim to having 3,500 books on “three Kindles (including the DX), two iPads (both versions), his iPhone and his Android smartphone” — emphasize the hardware, not the software. But that would sound boastful.

If Kevin Kelly is correct about the future of books — they will be “accessed” not owned — then how will we categorize our love affair with the printed word…oops…the…word?

May 1, 2011

Another view of the library of the future from Jeff Koterba at the Omaha World Herald.

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Ebooks Continue their International Assault

April 9, 2011

An informative article in today’s Globe & Mail highlights the plight of Canada’s largest book chain, Chapters/Indigo (formally, Indigo Books & Music Inc.). Unlike in the United States, Chapters/Indigo is already the “last man standing” among bookselling conglomerates. It’s like Barnes & Noble would appear after it ate Borders.

As with many flagship corporations Chapters/Indigo is personified by its CEO and largest shareholder, the very visible Heather Reisman. Reisman has conquered tough competition and tough markets to emerge the sole winner of Canada’s chain bookstore wars. (Anti-competitive you say? How 1970s of you.)

With an ominous headline, Indigo’s Heather Reisman Faces Digital Reckoning, Marina Strauss says that these days Reisman’s favorite book doesn’t have a Penguin on the cover. No it’s Onward, Starbuck founder’s Howard Schultz’s story of turning those coffee shops around by the clearly innovative methods of closing unprofitable locations, firing a slew of people, and adding some new products. (Having read his book, Schultz is now reportedly “eager to work with Ms. Reisman,” although she already has Starbuck’s kiosks in most of her stores. That’s the problem with too much retail consolidation: it’s hard to find new friends to play with.)

I’m with Ms. Reisman in the prediction predicament. In 2009, she guessed that digital book sales would “erode 15 percent of her traditional book business within five years. Now she’s predicting it will be 40 percent.” Only Mike Shatzkin seems to have accurately guesstimated the forward thrust of ebooks.

Reisman hedged her digital bet by taking about a 60% stake in the ebook platform Kobo (which is Borders ebook bet as well). Unfortunately Kobo lost $10-million in its latest quarter and is running far behind Amazon (and perhaps Apple) in the ebook delivery business.

The Kobo in BlackBerry Flavor Too


So what to do? Indigo is increasing its selection of more-profitable-than-pixels “tableware, toys and tote bags.” Reisman drew scorn several years ago “by ditching sofas to stop people from loitering, replacing them with hard chairs.” She’s decided to reverse the move by “bringing back the soft chairs to help re-establish the retailer as a place to hang out.” And, it is hoped, “make purchases.”

Coming Soon to a Bookshop Near You

I have seen the future of bookselling and it is Shea butter handcream.

July 6, 2011: I was in a Chapters/Indigo store this afternoon. The front half was just like a bookshop. The back half felt like a Pottery Barn. I thought to myself: “It makes more sense to be a Pottery Barn selling a few books than a bookstore selling a few pots.”

July 8, 2011: “Indigo has made clear it intends to transition to a new product mix that includes more giftware, toys, and lifestyle products, with less shelf space reserved for books. At a vendor-relations meeting last week, the chain also informed suppliers that it is evaluating returns on a shorter timeframe, meaning some books are likely to spend less time in stores.”

July 23, 2011: Earlier this evening I went into a large Chapters/Indigo in downtown Vancouver in search of any book by Pulitzer Prize winning author Studs Terkel (any of the several dozen he has authored). His book 1974 classic Working is #17,728 at Amazon. It cannot be purchased from any of this company’s stores in Canada; none of his books can. A clerk assured me that one day Terkel would again be popular. “Look at Catch 22,” he noted. Precisely.

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Celebrating with Sound

April 7, 2011

On April 5th three musicians celebrated the 100th anniversary of Seattle’s Union Station with a free performance using instruments they made and by utilizing the building’s cavernous interior. This lovely short video was made by The Seattle Times’s Ken Lambert.

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