January 2012

Publishers vs. Libraries: An E-Book Tug of War

Last year, Christmas was the biggest single day for e-book sales by HarperCollins. And indications are that this year’s Christmas Day total will be even higher, given the extremely strong sales of e-readers like the Kindle and the Nook. Amazon announced on Dec. 15 that it had sold one million of its Kindles in each of the three previous weeks. But we can also guess that the number of visitors to the e-book sections of public libraries’ Web sites is about to set a record, too. And that is a source of great worry for publishers.

In their eyes, borrowing an e-book from a library has been too easy. Worried that people will click to borrow an e-book from a library rather than click to buy it, almost all major publishers in the United States now block libraries’ access to the e-book form of either all of their titles or their most recently published ones. Borrowing a printed book from the library imposes an inconvenience upon its patrons. “You have to walk or drive to the library, then walk or drive back to return it,” says Maja Thomas, a senior vice president of the Hachettte Book Group, in charge of its digital division. And print copies don’t last forever; eventually, the ones that are much in demand will have to be replaced. “Selling one copy that could be lent out an infinite number of times with no friction is not a sustainable business model for us,” Ms. Thomas says. Hachette stopped making its e-books available to libraries in 2009. E-lending is not without some friction. Software ensures that only one patron can read an e-book copy at a time, and people who see a long waiting list for a certain title may decide to buy it instead. (Dec 24)

The Book Beyond the Book

That sound you hear is the wrapping being torn off of millions of Kindles and iPads. When those devices are fired up and start downloading texts, it will be the greatest shift in casual reading since the mass market paperback arrived six decades ago. Will this dislocation destroy the traditional book? Will it doom the traditional independent bookstore? Will Amazon and Apple control the distribution of thought and culture in America? All these questions will be played out imminently.

The migration to e-reading is usually reported as a one-way journey: You get a device, start downloading and never look back to the old-fashioned book. You start mocking those type-filled volumes reeking of another century. Meanwhile, the defenders of the old ways are digging in their heels. I know readers who swear never to read anything electronic, saying they find the format muddy and confusing and sad. Dennis Loy Johnson, a former academic who is the proprietor of Melville House, a small but innovative publishing firm, wants to reconcile these warring factions. Why should electronic and traditional not collaborate? Melville has introduced a new series, HybridBooks, to meld the two cultures. On the physical side, the Hybrids are attractive, stripped-down paperbacks, with nothing inside but a short classic text. The electronic element comes in with the ancillary material. Melville House calls its Hybrid line “enhanced print books.” It is a name that makes Mr. Johnson laugh. “Everyone’s always talking about enhanced e-books in this business,” he said. “They think I’m making fun of them when I call our print books enhanced.” (Dec 25)

Cable Channels Set to Begin Election Year Coverage

America’s trifecta of cable news channels, Fox News, MSNBC and CNN, are just about ready to show off their election year staffs. Each channel plans to cover the one-night Iowa caucus for a stretch of several days, maximizing both their investments in the state and the ratings potential of a Republican presidential campaign. On caucus night, Jan. 3, each channel will replace its usual prime time schedule with special reports. The extensive coverage plans highlight the importance of politics to the bottom lines of the cable news channels. Past ratings indicate that the more seriously the channels treat events like the Iowa caucus, the more viewers tune in. So the networks are starting early. (Dec 28)

The Danger of an Attack on Piracy Online

[Commentary] By invoking the acronym SOPA right at the get-go, I may be daring many of you to check the next column over for something a little less chewy. After all, SOPA, which stands for Stop Online Piracy Act, sounds like a piece of arcane Internet government regulation — legislation that entertainment companies desperately care about and that leaves Web nation and free-speech crusaders frothing at the mouth. The rest of us? What were we talking about again? Stay with me here.

SOPA deals with technical digital issues that may seem to be a sideshow but could become crucial to American media and technology businesses and the people who consume their products. The legislation is the rare broadly bipartisan piece of apple pie. The House Judiciary Committee is expected to resume hearings on it this month and all indications are that it will approve the measure, setting up a vote in the full chamber. The Senate is also expected to vote on its own version of the bill when it returns from the holiday break. Virtually every traditional media company in the United States loudly and enthusiastically supports SOPA, but that doesn’t mean it’s good for the rest of us. The open consumer Web has been a motor of American innovation and the attempt to curtail some of its excesses could throw sand in the works of a big machine on which we have all come to rely. Rather than launch into a long-winded argument about why the legislation is a bad idea — it is, as currently written — I thought it might be worthwhile to boil SOPA down into a series of questions. (Jan 1)

Apple iPhone Will Drag Down Telecom Profits

The iPhone is both a customer draw and -- at least initially -- a margin killer for telecom companies. That’s how the fourth quarter will look for Verizon, AT&T and Sprint in the first quarter of sales for the iPhone’s latest iteration, according to an analysis from Wells Fargo.

Because of subsidies being given to consumers, the more iPhone demand, the bigger the hit to this quarter’s bottom line. Wells Fargo hikes its expectations for Verizon Wireless iPhone activations by 29% to 4.5 million, but Wells trims a penny from its expectations of Verizon’s quarterly earnings, to 54 cents a share. Wells also holds its outlook on total subscriber growth for contract customers at 1.3 million, even with the third-quarter figures. Verizon shares are 1.6% higher today, to a four-year high as the stock price continues a recent string of gains. (Dec 23)

Samsung Expands US Handset Lead; Android Smartphone Share Up

Samsung strengthened its lead as the top handset maker in the U.S. during the three months ended in November, while Google Android platform expanded its dominance of the U.S. smartphone market, according to industry tracker comScore.

ComScore's latest survey, which included more than 30,000 mobile subscribers, comes amid tight competition in the sector. In the handset market, No. 1 Samsung and No. 4 Apple saw their market shares increase as rivals such as LG Electronics, Motorola Mobility Holdings and BlackBerry maker Research in Motion saw declines during the three-month period. Samsung's share grew by 0.3 percentage point to 25.6% while Apple's share was up 1.4 percentage point at 11.2%. In the smartphone segment, No. 1 Google and No. 2 Apple gained market share at the expense of rivals including former market leader Research-in-Motion and Motorola--which is being acquired by Google. Google's market share increased 3.1 percentage points to 46.9%, while Apple increased by 1.4 percentage points to 28.7%. Research-in-Motion saw the biggest decline, down 3.1 percentage points to 16.6%.

Five tech predictions for 2012

[Commentary] So what does 2012 have in store? Here are my predictions. 1) Social media will lose its sizzle. 2) The bubble will pop for the current crop of tech IPOs. 3) An explosion of the tablet market driven by sub-$100 tablets. 4) Voice recognition goes mainstream. 5) “Cloudburst” shakes the tech industry. (Dec 30)

Big technology trends and storylines of 2012

[Commentary] What will the new year bring? What storylines will dominate the conversation about the tech industry? We’ve scoured forecasts released by analysts, journalists and industry insiders to find what they say will dominate the conversation about the tech industry next year. Here’s what to watch for:

Mobile payment systems will go mainstream.
The Facebook IPO will finally happen, and it will be major.
Tablets will continue their hot streak.
‘Ultrabooks’ will gain traction as viable tablet alternative.
Siri’s popularity will spawn imitators.
Big tech firms will keep jockeying to be all things to all people.
“Hacktivism” and other cybersecurity threats will get more sophisticated.
Patent wars will slog on.

(Dec 30)

2011: The year when it became the norm for the device in your pocket to be the center of your world

[Commentary] As far as years in technology go, 2011 was one for the record books. It wasn’t just about big battles, such as Apple vs. Samsung, Microsoft vs. Google, AT&T vs. the world or Hewlett-Packard vs. itself. It wasn’t just about the growth of apps and the ever-increasing pervasiveness of the Web in our daily lives, although there were plenty of amazing developments in both of these realms. It wasn’t just about hardware or software. And it wasn’t just about toeing the line or trying to hold onto it. It was a year of incredible innovation, progress and excitement. It was a year when — despite all the political and economic chaos around us these days — optimism ruled. And how many other industries can you say that about right now? (Dec 28)

As Iowa caucuses near, TV stations see ad buys boom after long lull

For all the hand-wringing about money in politics, a few Iowans spent the year hand-wringing about how little of it they were seeing. Station managers and sales teams at Iowa television stations had expected major profits but saw very little until the past few weeks, when PACs and candidate campaigns poured into their empty coffers pennies from heaven.

In interviews at the top affiliates in Des Moines, the state’s largest market, sales managers said they saw the same pattern: a complete dearth of ad buys until the August straw poll in Ames, then silence on the airwaves until late November, then a complete return to fortune in the last two weeks of 2011. State officials, waiting to see how rival states might usurp Iowa’s first-in-the-nation status, did not lock in the caucus date until late in the year. Subsequently, candidates waited before purchasing airtime to sway voters. Then, after the Jan. 3 date was resolved, debates drew record audiences and candidates exploited a cost-free stage to get out their message. And after the final pre-caucus debate, in mid-December, the deluge. The last quarter brought in a combined tally of nearly $3.5 million for the state’s two top stations, WHO and KCCI, who are viewed in the industry as the major players. Campaigns focused also on three other significant markets — Cedar Rapids, Sioux City and Mason City — where airtime is less costly. (Dec 31)

Benton

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