There is, as ever much to enjoy in reading Rebecca Smart’s analysis over on The Bookseller. One thing that stands out for me though is the ease with which she talks about topics that rarely get flagged up in publishing discussions, things like working capital and cash flow, critical elements in the world of books, physical or digital that perhaps more often than makes sense get relegated to the back room while the cool topic like art, literature and the rest get all the attention and discussion:
The current trade publishing sales process means that money and time are invested in 15 to 18 months’ worth of books at any given point. If we could reduce the length of the pipeline for most of the books we publish we would be able to invest more in each book – and the fact that the business of publishing would become less working capital-intensive would improve its chances of survival and therefore of continuing in its important role of finding and developing talent.
5. As the way people consume media changes, book publishers are realizing they are content creation and rights management companies and not just book publishers. Many of them are now playing in the app market, educational technology market and other areas they likely wouldn’t have dreamed of a decade ago. To that end, book publisher Houghton Mifflin Harcourt recently capitalized by going public in November. The company is seen as more of an educational company and less as a book publisher by Wall Street. In fact, one-time trade publisher Wiley has almost completely transformed itself into an education and technology company partially through a series of divestments and acquisitions.
Lurking in a seemingly not related post about how the iconic Apple product is slowly becoming less important to Apple, is a great few lines about the nature of the music business and, more generally, the content business at a meta level:
One could argue that trying to charge a little extra and make more profit is more trouble than it’s worth for Google or Apple (or even profit-hungry Amazon) – better to offer it at cost or thereabouts to enhance the value of the broader platform, which is where the real money comes from (advertising and devices respectively).
The same thing is happening in books and video – content is a condition of entry to the platform game that you provide at cost. This obviously makes life pretty tough for startups – it’s hard to try to build your own ebook store or download-to-own music store right now when any device your customers might use probably already has an at-cost service built-in. The one place this might be different is in video, since in that business it is actually possible to have unique content – but of course this is very expensive.
Coming on the heels of their decision to offload MPS, this suggests that Macmillan are very keen to concentrate on publishing, at least in India. It’s funny though, it’s almost as if they were tidying up their look for something.
The acquisition, which includes MPIL’s printing operations in Chennai, with a deliverable capacity of about 6 million books annually, would strengthen Repro’s foothold in the South Indian market.
Commenting on the deal, MPIL Managing Director Rajiv Beri said: “Printing is not our core activity and we would like to focus on publishing growth. This is a strategic decision which will further consolidate our investments and energies in development and delivery of quality, need-based content.”
Clock this one up to a great real-world play that adds value to an existing portfolio of titles and content while also building on Osprey’s digital potential. Old House seems like the perfect fit for Shire and like some of Bloomsbury’s recent acquisitions the opportunities to create something that extends the brand into digital publishing is very real. Oddly enough too, the acquisition suggests that Richard Charkin’s comments at the ‘Are Publisher’s Relevant?’ debate yesterday about how the new digital age makes strict focus (here’s hoping I didn’t pick him up incorrectly) less important when building list has a real-life example, Osprey the home of a heritage, a military and a science-fiction imprint!
Rebecca Smart, Osprey Groups Managing Director, said:Old House is my ideal addition to the Osprey family. Weve worked incredibly hard with Shire over the last four years, and with real success, to establish ourselves as a major force in the British heritage market. The addition of Old House, especially bearing in mind our plans to grow and diversify its list, will really help to consolidate our position in that sector.