AOL to Buy The Huffington Post for $315 Million

Pay nothing for content; aggregate that content; build brand; sell franchise for $315 million. And there you have it. Huff Post's profitability, however, remains an unknown. But AOL seems only to have paid about seven times gross revenue, so from that perspective the price is quite reasonable. NYTimes: "The deal is AOL’s biggest since separating from Time Warner in 2009, and showcases the company’s intent to focus on original content. (In September, AOL bought TechCrunch, the influential technology blog founded by Michael Arrington.) But it also represents a major media move by The Huffington Post’s co-founder, Arianna Huffington. ... "

Joe Wikert: Bookstores Should Copy Best Buy's Approach

Publishing 2020 Blog: "Have you noticed you can buy a Nook or an iPad on Amazon? So if it makes sense for Best Buy and Amazon to offer all these devices, why don't the brick and mortar bookstores do the same? I think it's because the brick and mortars foolishly believe the only way they can win the ebook war is by selling only their device. The problem with that logic is they're focusing on the wrong goal. They're too busy worrying about device sales when they should be investing more in the content itself. Amazon gets this. That's why they have a Kindle reader on all the major platforms (e.g., Apple and Android). ... "

Enhanced Editions, Vooks, Amplified Books ...

Of course, "enhanced books," "vooks," etc. are ideal for tablets and nonstarters for eReaders such as Nook and Kindle, which are not designed to handle multimedia. But this fact is not a death knell for eReaders as a class of devices, especially as these become steadily cheaper, elegant, compact and efficient. I can easily see myself traveling with a tablet in my briefcase and an eReader in my breast pocket. I don't always want or need multimedia. Sometimes I just want to curl up with a good book, and to do so without digging out the tablet. The simple eReader e-Ink screens are MUCH easier on the eyes when it comes to extended reading.

Multimedia E-Books, Adorned With Video Extras - NYTimes.com: "Penguin Group released an 'amplified' version of a novel by Ken Follett last week. And on Thursday Simon & Schuster will come out with one of its own, an 'enhanced' e-book version of 'Nixonland' by Rick Perlstein. All of them go beyond the simple black-and-white e-book that digitally mirrors its ink-and-paper predecessor. The new multimedia books use video that is integrated with text, and they are best read — and watched — on an iPad, the tablet device that has created vast possibilities for book publishers."

In the New Publishing Environment, Small/Indie is Beautiful

FT.com / Media - Wylie’s split with publisher seen as bad omen: "The severing of ties between publisher Random House and Andrew Wylie, one of the world’s most powerful literary agents, left many executives fearing the showdown over e-book rights would lead to the death of the 500-year-old publishing business as it is known. ... It is not the first omen about the potential end of the publisher’s role as middle man in the books business. The role of the music label, in much the same way, has been threatened by the internet. ... "

Here's my take: Publishers as a class are not in danger of extinction. But the enormous dinosaur houses who dominated for so long? They find themselves hobbled by new climate circumstances - crippled by their weight, this no longer an advantage.

Our Random Houses and Simon and Schusters - still carrying on standard (though declining) print/brick-and-mortar bookselling - labor under the burden of legacy expenses/infrastructure/corporate cultures wed to the old publishing model, a model which provides less and less sustenance every day.

It is somewhat easier for smaller players to adapt their businesses and evolve. (Survival of the fittest.) Also, the low cost-of-entry enabled by eBooks and POD allow new players, indie authors, and other upstarts to mount significant competition to the "majors" in a way they never could before.

The most important capital in this environment is intellectual capital: the smarts to assemble, promote and sell worthy publications.

The dinosaurs are long gone. But the birds remain. Small is beautiful.

Random House Agonistes

As punishment for abandoning the sinking Random House square-rigger, RH announces that it will not invite Wylie back aboard. Wylie, in turn, speeds away in a new state-of-the-art motor yacht. At least that's what he should do. Stay the course, Andrew.

NYTimes.com: "The literary agent Andrew Wylie announced on Wednesday that he had started his own publishing venture and would produce e-book editions available exclusively on Amazon.com for 20 titles, including those by Philip Roth and Vladimir Nabokov. Now Random House, which had previously staked a claim for the e-book rights to most of those books, has issued a forceful response: it will stop doing business with the Wylie Agency. ...Mr. Wylie said he was taken by surprise by Random House's move and was not sure how he would respond. 'I'm going to think about it a little bit,' he said."

Big Surprise: Random House Disputes the Wylie/Amazon eBook Deal

From eBookNewser: "Random House is not happy about the Wylie Agency's exclusive eBook deal with Amazon that was announced this morning. The publisher released the following statement from spokesman Stuart Applebaum: 'We are disappointed by Mr. Wylie's actions, which we dispute. Last night, we sent a letter to Amazon disputing their rights to legally sell these titles, which are subject to active Random House publishing agreements. Upon assessing our business options, we will be taking appropriate action.'"

RH did not have a leg to stand on when it came to e-rights for the Styron backlist, hence that list's movement to Open Road. Neither will they have a leg to stand on when it comes to these other contracts, all of them negotiated long before e-publishing was ever envisioned, or the term eBook coined.

Amazon Content Coup: Two Year eBook Exclusive on Select Roth, Mailer, Bellow, Ellison, Hunter Thompson, Nabokov, Rushdie and Updike Backlist Titles

From the Los Angeles Times: "Amazon.com now has exclusive rights to sell the e-book versions of some of the best-known titles from top literary authors Philip Roth, Norman Mailer, Vladimir Nabokov, John Updike and more. In an announcement late Wednesday -- shortly after midnight Thursday, East Coast time -- the online retailer revealed that a deal with the powerful Wylie Agency will give Amazon.com the exclusive e-book rights for two years to books such as 'Lolita.' The e-books will only be available through the Kindle store."

How's this for scoring a significant content-advantage over Apple, Google, and all other contenders? Also note the very important element of agent Andrew Wylie bypassing "publishers" per se, creating his own imprint, and cutting a deal directly with the eBook retailer. This is the kind of thing that has many publishers shaking in their boots. According to the New York Times, Wylie's new venture is called Odyssey Editions.

In making the announcement Mr. Wylie opened a new front, and a possible negotiating tool, in a debate over e-book rights for what are called backlist titles. Many traditional publishers have said they own the electronic rights to those books, but some authors and their estates have disagreed, arguing that since the books were published before e-books existed, the digital rights were not explicitly sold to the publishers.

“The fact remains that backlist digital rights were not conveyed to publishers, and so there’s an opportunity to do something with those rights,” Mr. Wylie said in an interview.... Mr. Wylie declined to disclose the financial terms that Odyssey had reached with authors or their estates, but he said they were more favorable than the terms that other publishers were offering.

Apple take note: The Kindle eBooks will be priced at $9.99.

Granted, the exclusive is only for two years. However, the next two years are going to be critical for all players in influencing the longterm retailer and ecosystem choices for hoards of new eBook readers; a monopoly on high-demand backlist items won't hurt at all.

Free Content at Starbucks

Well, you'll still have to pay for the content of the coffee cup. But as of July 1st, something called the "Starbuck's Digital Network" will give in-store customers free access to such paid sites and services as the Wall Street Journal, Apple's iTunes, USA TODAY, ZAGAT, etc. The list includes the New York Times - which presumably means that Starbucks customers will be allowed to do an end-run around that publication's impending pay-wall restrictions. There will also now be no arbitrary time limit to instore free WiFi usage. (Up to now, there has been a two hour limit.) Find the Starbucks press release here.

News Corp's Investments in Digital Reading

News Corp has purchased Skiff LLC, an e-reading tech firm formerly owned by Hearst, and has made a substantial investment in Journalism Online, an outfit which helps publishers charge readers for online news. Of course, both these moves further Rupert's ambition to monetize his content across every and any platform available. More from Leena Rao at TechCrunch.

Tim Beyers: Amazon/Apple Strategic Positioning for the Coming Battle

From Motley Fool:

Beyers says Amazon leads Apple when it comes to scale.

Publishers still see Amazon as the king, and that's not going to change. Apple has a long way to go to overcome Amazon's volume lead in terms of books, in terms of content yields. It's not like Apple won't strike great deals with publishers. But they're way behind Amazon in terms of doing deals with publishers. And I think the competition is going to heat up. Ultimately, I think that benefits publishers, because if Apple and Amazon knock heads, maybe publishers get some favorable terms. And you know, this is one of those things where users just get more access to more great content; and that's great for users. But at the same time, I don't really think it's a foregone conclusion that Apple takes over this market. The publisher relationships still belong to Amazon.

But Apple has the advantage of the iPad's flexibility.

The iPad is a great device. Now that it's out and consumers love it, there's really almost no interest in buying a brand-new piece of Kindle hardware, and the iPad has proven to be that good. And I admit, I was a skeptic on this. I thought of the iPad as a large iPod Touch, and I wasn't certain that it was going to knock the Kindle off its perch. Now, in terms of hardware, it does look like the iPad is the device to beat. And some of the research suggests that people not only love it for the hardware, but they love it for apps. And even more important, they love it for newspapers and magazines. That's a really big advantage for Apple. So as much as Amazon has the book publishers in its corner, very quickly Apple could find the newspaper and magazine publishers in its corner, and that makes this battle very interesting.