Michael's Blog

One day after the launch of the IPad, Macmillan – one of the major book publishers in the US – announced to Amazon that they would not agree with the Amazon pricing of their content anymore. The following weekend a showdown happened that eventually concluded with Amazon giving in and changing their pricing model. This was the first public locking of horns about ebook pricing and may be symptomatic of future discussions between publishers and digital distributors.

Amazon wanted to sell books for their Kindle ebook reader at 9.95, Macmillan said they want to determine the pricing of books themselves, not undercut their hardcover editions by that much and sell at least some of them at a higher price (14.95), just like they have always done with distributors/booksellers of paper titles. Macmillan stated that they would not allow Amazon to sell their books. This was communicated by their CEO John Sargent via a paid ad in an online newsletter on Saturday.

Amazon promptly withdrew all Macmillan titles – e- and paper books – from their online store (which had the effect that Macmillan titles shot to the top of the other online retailers, like Barns & Noble).

Eventually, Amazon gave in, allowed Macmillan to set their own pricing and re-instated all titles.

In the meantime, other publishers, like the french Hachette Group, have joined Macmillan. Harper Collins have also expressed their dissatisfaction with Amazon’s pricing.

Amazon’s Kindle Team posts a letter to their customers citing a mission for inexpensive ebooks.

So this was to a big part prompted by the introduction of the IPad by Apple, who will open an ibook store in competition to Amazon, so far the dominant ebook distributor.

The Apple IBook store will work according to the “agency model”, in which publishers determine pricing of their titles, proceeds are split 70/30 between publisher and Apple. Amazon, on the other hand, operates on a low cost model, buying books at a big wholesaler’s discount (70%) from the publishers and selling them at bargain pricing.

So the result is that ebook prices are going up. In the short term. In the long term there will be competition, and many more of these battles will be fought. No publisher will price themselves out of a competitive market, and if titles are available on a variety of platforms, from a variety of distributors, this can only be a good thing in the long run.

2010 will be an exciting year in book publishing and distribution. Old business and pricing models will have to be questioned and revised, and even traditional media producers must re-think, ideally before technological advances, market changes and consumer behaviour force them to.

Sunday morning on Bondi Beach, 27 degrees, time for a swim.

There is a promotion by IKEA for 30 years of their most popular book case, Billy. There are hundreds of books in a very long book case and if you bring an old book, you can exchange it for a new one. You can also buy books, proceeds are donated to the Australian literacy and numeracy foundation.

On the beach, print rules. Magazines and paperbacks go where LCDs are impossible to read and too cumbersome to take. It will take a while until printed media is replaced by IPads here.

This week the Apple IPad was unveiled after much anticipation and speculation. There was a lot of media hype, the most entertaining of which were probably  Jason Calacanis’ tweets before the event about features he pretended to have seen on a prototype, which were taken as truth by some journalists who re-posted them immediately, further raising expectations (and showing the dilemma of confusing tweets with a respectable news source in the process).

The official video is here and the device looks definitely cool.

It does, however, not have anything unexpected, there are no unknowns, nothing magical in the device, it is a 9.7 inch screen that you can use to play games and read news, books and magazines. It is lacking a few features that were expected. It is clearly made to consume contents, not to create.

To me – and I am working in a printing company – the IPad looks like a gaming tool and like print replacement. It has the ability to make online content accessible and trendy.  Apple has used brilliant design to make technology accesible many times before, and I am sure the IPad will accelerate the uptake of online distribution and consumption of content.

“The iPad and other tablets will continue the erosion of preference for printed goods” writes Dr Joe Webb.

I don’t know if it will kick some new life into newspapers or magazines, but it will make their online content available to more traditional readers, who so far have not spent extended time with online reading.

As for books, it really depends on whether Apple can secure the content. If you decide to read for an extended period of time, say a book, you will welcome the fact that you will be able to get the exact content you want within minutes. Whether you will be able to focus on an LCD screen, whether the updates from facebook and messaging applications will not distract you, and whether you will actually have the device ready and powered up where you want to read is another question.

At least now we don’t have to speculate on what the IPad will be and we can start thinking about whether it will bring any change, what it will change and where it will accelerate change.

News (i.e. Twitter) this evening is buzzing with news of the potential withdrawal of Google from China.
Matt Drummond, Corporate Development and Chief Legal Officer, posted A new approach to China on the Google blog, declaring that Google will take a stand against censorship.  “We have decided we are no longer willing to continue censoring our results on Google.cn”, he writes and then “We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China”.

This is a monumental and courageous move. Every other western corporation in China is trying to build relationships and capture the world’s biggest and fastest growing market – Google sticks to its principles and says: not with us, or our collaboration. Everybody else may play along as the government pursues dissidents, imprisons them and disregards values we regard as fundamental like freedom of speech. Or is it about business rather than morals? Figures from the Chinese market indicate, that with 15% gain of market share (to 43%) in the last five months alone, Google was very successful and rapidly gaining ground against competitor Baidu.

Another opinion by Susie Wee, her “main point is that any government has good points and bad points, so we must take a balanced view”.

Paul Carr questions Google’s moral motivation in Soul Searching: Google’s position on China might be many things, but moral it is not, if Google had morals, they would have made this call much earlier, not after four years of censorship. MG Siegler defends Google and states that “it’s never too late to do the right thing”.

So is it more important to be right, or to be effective? Is this a loss cutting exercise, disguised as a moral act? Whether a move like this is effective or not will only show in time, during which the goal of this effectiveness may be re-defined several times. Trying to be right or “to do the right thing”, is a values question, and often a very immediate decision to be made. For Google the point for this decision came after repeated intrusions, they made it and nobody knows, what the implications will be in the long run and how much it will hurt their business. What they do know, is that they stood up and did not tolerate an environment that compromised their practices and values.

The reaction in the traditional News, in blogs and on Twitter: See translated tweets at the China Digital Times.

I spent most of Monday in a Sydney local court, waiting to act as a witness in a negligent driving case. The defendant had no legal representation and was not sure whether to plead guilty, so while he sought advice, the witnesses had to wait.
I was watching the constant coming and going in the court room. Open door, bow to judge, find a seat. Get up, go to door, bow to judge, leave. A number of cases were adjourned, the ones that the judge deals with are mostly first offences and range from traffic offenses to assault.

9 out of 10 offenses were alcohol related.

There is the pub owner, who met some mates on the way home, had a few beers and got caught DUI. He cannot afford to loose his license and has installed a breathaliser in his car that won’t let him drive after drinks. He gets six months without license and 18 months with the breathaliser, it’s not his first offence.

There’s the guy who assaults his girl friend after coming home drunk, telling her in no uncertain terms what he expects of a good girl friend. They are both here together today, she loves him, he gets off on probation and will have to join a course on anger management.

There’s the guy that threw a bottle out of a car at another driver and lucky for both did not cause any damage, there’s the guy who attacked a bouncer who didn’t want to let him into the club and there is the jealous boyfriend who bashed the guy who talked to his girlfriend.

It’s all alcohol. The judge starts another sermon. She mentions the maximum penalty everytime. She stresses the seriousness. She lets most of them off on probation and fills the anger management courses. Chance that they won’t do it again are below 40%, however, they most likely will not get caught.

A very sobering experience, should be compulsory life education.

Sometimes I work on a reply for a long tender request, one of those big documents that ask for a great amount of detail from every bidder, and I wonder wether it might be a good idea to send this back to the tenderer:

Dear prospective customer,

Thank you for submitting your request for tender, we appreciate the work that has gone into the preparation of this extensive document.

Before we prepare a reply we will need to obtain a few clarifications:

1. Confidentiality

During the tender process we will be asked by you to disclose confidential information about our company including financials, equipment lists and specifications, plans for intended new acquisitions, business plans and future strategies.

1.1   Provide written statements from all personnel involved in the tender process that this information will not be disclosed to third parties including a written statement that the submitted tender document, all appendixes and attachments and all other information submitted by us in writing or during a presentation will remain our intellectual property and is copyright by us. Any knowledge gained through this tender process can only be used after our expressive written agreement.

1.2   Prepare and sign a confidentiality agreement relating to all information gained through submitted written and aural information, presentations, factory tours and other materials gathered during the tender process and the subsequent supplier relationship for the duration of the term.

2. Company / Financial Stability

We are planning a long term supplier relationship and need to ensure that we partner with financially stable organizations.

2.1 Give a brief company overview (not exceeding 20 pages) including history, capabilities, SWOT analysis and main competitors.

2.2 Provide your audited financials of the last three (5) years.

2.3 Provide your business plan for the next five years.

2.4 Provide the names of your top fifteen customers during the financial year 20008/9.

2.5 Prepare a detailed declaration containing details of any negotiations with other entities regarding company merges, takeovers, acquisitions and any other business impacting initiatives.

2.6 Provide details of the three most recent suppliers lost including referee contact information. Include reasons for loss and strategies to avoid similar occurrences in the future.

2.7 Outline your occupational health and safety management system.

2.8 Include a detailed business continuity plan.

3. Environmental Policy:

Our company has invested substantial resources to obtain the right to bear at least three (3) logos assessing environmental accreditations on their letterhead.

3.1 Provide certifications and evidence of any environmental initiatives conducted in the last three (4) years.

3.2 Provide your short and long term environmental policy and enclose evidence thereof.

4. E-business capabilities:

During the tender process we will suggest and scope a refined online system to facilitate communications relating to print production, warehousing and logistics.

4.1 Provide evidence of IT capabilities and sufficient resources to ensure internet connectivity and advanced functionality like ftp file transfer.

4.1.1 Outdated and badly maintained desktop software increases costs relating to development, ongoing maintenance and help desk costs. Specify the brand and version number of the web browser software and any plug ins employed within your company.

4.1.2 Describe your IT management team including professional experience and annual budget.

4.1.3 Describe your IT training policy. Include certificates and other evidence of training concluded within the last five (5) years.

4.1.4 Detail your on and offsite backup procedures.

4.2 Provide evidence of the willingness to not just request features like job tracking, but also use it.

4.3 Provide at least three (3) written references of providers of another online procurement system that you were able to operate without forgetting your password on a weekly basis.

5. Account Management:

Good and consistent account management are critical for a successful supplier relationship.

5.1 Nominate your account team.

5.1.1 Submit all qualifications relevant to this position including print experience.

5.1.2 Submit the main contact person’s job description and salary structure including bonuses. This will let us determine the stability of the position and whether personnel change is expected every three months and the contact person we have trained will be substituted by a junior so that we have to start from scratch again.

5.2 Submit an escalation structure including contact details.

5.3 Attach an organizational chart including all related companies. Highlight key management staff.

Please submit your reply by tomorrow noon (12pm) via our online tender tool. Late replies cannot be accepted.

Monthly Computer Pals Meeting

Last week I was invited to talk at the monthly Computer Pals meeting and I met a group of great people that are all interested in learning about digital technology. Computer Pals is a club of seniors on Sydney’s North Shore, they have over 400 members and a waiting list of more than 100.

Computer Pals conduct courses on topics such as using PCs, the use of popular software packages, connecting and communicating via the internet. They organise talks on technical topics once a month.

I was invited to talk about recent developments in print, recent investments into big presses as well as new technologies such as digital printing and ink jet presses. I included a short printer’s winge about dropping volumes in print, technology driven changes and threats from online technologies.

All wired up and talking at the Computer Pals

The audience was great, there were many questions and nobody fell asleep (not just here an important indicator on the quality and suitability of the talk). Almost everyone in the audience had some sort of connections to printing or even the printing industry, either through having worked in it themselves or through relatives.

An interesting topic was the development of digital book printing and the fact that it has become very affordable to self publish and get your own book printed at book shop quality, even at low quantities. Obviously many in the audience saw an opportunity and incentive to write and then produce their own book.

The Computer Pals definitely “got it”, they understand the need to keep learning new technologies and their applications. It was a real honour to talk at the club.

Sometimes, when you are interviewing people for CSR or administrative roles, you want a quick overview of the computer knowledge of the applicant. In the printing industry, as in most other industries, ro;es and responsibilities have changed, CSRs and account manager can no longer just spend their time liaising with customers. There are requirements of managing thousands of jobs in a month, administering web to print and online job management systems, viewing and understanding lists for variable data jobs etc. and without hands on knowledge of computers and software applications this is near impossible.

Here are some ideas for a few questions for self assessment, any comments are welcome.

Computer Knowledge Assessment:

The brief questions below should help us to understand your computer knowledge. Please choose statements that describes your competence best and that you are comfortable with:

Microsoft Office:

Outlook:

□   I am not familiar with Outlook.

□   I can use Outlook to retrieve and send emails.

□   I am very familiar with Outlook. I organise my mail in folders and I set up rules to filter my mail.

□   I am an Outlook wiz, I can set up accounts, install add-on software and configure every aspect of Outlook.

Word:

□   I am not familiar with Word.

□   I can type letters and memos and store and retrieve them.

□   I can format documents and embed graphics.

□   I can format complex and long documents and set up headers and footers.

□   I am very familiar with creating and managing documents in Word, I use style sheets and document sections.

□   I am a Word Wiz, I can use almost every function.

Excel:

□   I am not familiar with Excel.

□   I can open and read basic Excel documents.

□   I can work with numbers and I cut and paste.

□   I can use basic formulas (SUM, basic calculations)

□   I can work with data in Excel, including sorting and filtering of lists.

□   I can use complex formulas and set up calculations over several worksheets.

□   I am very familiar with creating and managing documents, I use advanced formulas.

□   I am an Excel Wiz, pivot tables are my friends.

Other software that I am familiar with (please circle):

Adobe Acrobat             not at all           know it              know it well                   expert

Adobe InDesign            not at all           know it              know it well                   expert

please add any others:

_________                    not at all           know it              know it well                   expert

_________                    not at all           know it              know it well                   expert

_________                    not at all           know it              know it well                   expert

_________                    not at all           know it              know it well                   expert

_________                    not at all           know it              know it well                   expert

QR Codes are a popular type of two-dimensional barcode, which are also known as hardlinks or physical world hyperlinks. The quick readable (QR) barcodes can store a variety of text information, be read very fast and even upside down and can be scanned from a screen, a newspaper or magazine, flyer or even a billboard.

QR Codes store text, which can be:

• A website address
• A telephone number
• An SMS Message
• Contact Details (VCARD)
• A Google Map
• A Facebook or MySpace Profile

QR codes can be generated easily and read by scanners or camera equipped mobile phones. Many Nokias have the software built in, if you have an IPhone, you can download free QR barcode readers at the ITunes store.To generate qr codes you can use dedicated software or a number of free online tools, there is a list here.

QR codes can be placed in magazine ads or on outdoor billboards, pointing to further information about products. These hyperlinks on paper help integrating paper into the information and marketing media mix, they can be found on books, McDonalds packaging, pointing to information about your burger and there is even an example where codes on a cemetery point to information about people. Another very cool application is Starbuck’s loyalty IPhone app.

The code below is pointing to this post, if you have the software on your phone you can try it out:

Update: QR codes gaining popularity:

NYT: From Print to Phone to Web. And a Sale?

Some thoughts about high speed inkjet presses and their impact on print:

Inkjet presses are going to make a big difference in many digital and offset pressrooms to the point of being disruptive technology. They will bring a jump in in productivity and a substantial reduction in price for digital colour printing.

Presses available today are producing “good enough” quality, but not yet offset like quality.
However: There are samples from two manufacturers, Kodak an HP, that show that offset quality can be achieved. Key is the stock the press can print on, especially when thinking about offset replacement.

Inkjet technology will improve in output quality quickly as most RnD money seems to be devoted to this technology, and has been for a few years.

Inkjets have so far been mostly used in transactional printing, but now are moving into higher quality variable data and short run print including educational and trade publishing. This is a change for vendors, who need to satify a different set of requirements from printers compared to mailing houses and statement printers.

As more and more are sold and a wider range of models is introduced, Inkjet presses will substantially come down in pricing over the next few years.

Cost of consumables and service are not stable yet, different vendors have different costing models, factors are cap ex, service charge, cost of ink and in some cases print heads.

Printers (and suppliers) will need to re-think their pricing models with inkjets. Ink usage is a determining factor in cost per page/document, this may have been possible to be calculated in advance in transactional use, but will be much more difficult with jobbing and offset replacement work.

More info: There is a collection of links from the last few months covering articles about inkjet presses and manufacturers here.