Jan

7

The Coldest Night of Winter

Filed Under B2B, Blog, Education, internet, news media, Publishing, STM, Uncategorized | 2 Comments

Keep warm by polishing your share price, seems  to be the message this week.  Or by making a Bonfire of the Vanities of the traditional media.  While Autonomy gets a paste-ing for putting trade announcements into its equity markets RNS news filings, Pearson sees a steady rise in its share price because the analyst at Execution thinks that the idea that Bloomberg might buy the Financial Times is original, or even likely.  Meanwhile , the FT itself speculates that the CEO of Informa, Peter Rigby, may be fed up with his investors and be about to depart, and a snowy January in the UK is a good time for Reed Elsevier to bury gloomy news.  There are no buyers for the remaining US RBI businesses as a whole, so it is break-up , smaller scale disposals and closures from now on in.  The Reed share price fell, but not a lot.

Here then is a first clue to the nature of this new year.  Investors are getting more pro-active.  Prices for the major players have upside and, in Reed’s case, downside, built into them.  Analysts  perceive the coming media market reconstruction and want to get on with it.  At least that way share prices move and people get commissions.  Pearson is a long time target.  Its portfolio nature in Lord Blakenham’s Golden Day even included Madame Tussauds and Alton Towers.  Dame Marjorie Scardino cleared out the non-strategic, but drew a line at the FT and Penguin.  Ever since everyone has wondered why, but neither seemed likely even in the boom years to reach interesting valuations, so analysts concentrated instead on the growth and development of Pearson as a global education market leader.  But Execution is right.  There is unfinished business here.  Pearson add no value to the FT in the vertical, despite Dow Jones Mr Murdoch may still be interested, Bloomberg did buy BusinessWeek and are now as determined acquirors as they were once emulators.  And the FT would help in the great Boomberg struggle with Thomson Reuters, where IDC would be a very valuable component.

But why should a good story end there?  Penguin is now subscale in the consolidation of consumer publishing.  Would Mr Murdoch like to buy that for Harper Collins (or Hachette, or Bertelsmann for Random House?)?  The growth of world education markets, and the potential availability of Santillana, which could be an important route to building scale in Spain and Latin America, could be the targets on which investors might prefer to see Pearson concentrate. Meanwhile, Peter Rigby’s woes at Informa are said to derive from the investor revolt which prevented him from doing the Big Deal with Springer.  But Springer, now owned by the Wallenburg’s EQT, will want to do a big deal of its own to get the growth going which will justify buying that debt mountain.  Does the break up of Informa make sense, with Taylor & Francis going to Springer after all?  Or does that simply create a Reed-style problem of selling the rest at premium prices?  Datamonitor would surely find a home, but would Performance Improvement?  As buyers, Informa were fast and lucky: as sellers, those are qualities more usually found on the other side of the table.

So now we have gone full circle in investment terms from safely weighted porfolio media ownerships in which the variations in the cycle meant that not everything went wrong at once, to companies based on broad vertical specialization.  Pearson shorn of the FT and Penguin, or Thomson Reuters sans Healthcare, or, indeed, Bloomberg, are the role models.  The ancien regime is now McGraw-Hill and Reed Elsevier in this analysis.

On a cold night there may be persuasive logic here.  At least the equity markets hope so.  Something must be done to get those post-vacation media markets moving again, and what normally works is the power of rumour – turning into self-fulfilling prophesy.

Jan

4

Ten Things That Won’t Happen In 2010

Filed Under B2B, Blog, eBook, Education, Industry Analysis, internet, news media, online advertising, Publishing, STM | 5 Comments

Are you now as fed up with information industry predictions as I am?  Down here at the bottom of the garden we see things inside out and upside down, so here are 10 things you can confidently ignore in 2010:

  1. All forecasts of a return of advertising levels, regardless of media or format, to “normal”, “pre-recession levels” or equivalent values.  It is not going to happen.
  2. All pronouncements, political or commercial, that suggest that a law, technology or even divine intervention will solve the crisis of intellectual property management or control in the network.  We are in Eden and have eaten the Apple.  Live with it.
  3. Any press release that suggests that eBook, its standards or the technology of access is a finished process ready to be slotted into normal life on Earth.  It takes five steps to download to my Sony eReader – this is an abnormal process and only afficionados would begin to attempt it.
  4. Any pronouncement, even from Mr Murdoch himself, that says that paywalls work OK, people love them and are more than happy to contribute to the funds of hard-pressed News Corp.  Water still flows around a dam, given half a chance.
  5. Anyone who says that the advocates of Open Access in science publishing are winning, losing or changing anything with this argument.  The real issue is defining the future of scholarly communication in the network, and seeing where the commercial entrepreneurial input is needed.  Those who get detained in false arguments with fakirs and fake prophets will be engulfed and lost in the morass of inter-academic argument.
  6. All those who proclaim the eTextbook and say that a format switch will ensure that educational publishers will  live happily ever after.  Education is the Frontline, and is now changing rapidly.  2010 will be the year of critical transformation in many parts of the world except where state control is absolute (e.g. France) or the system is too poor to cope (the UK).
  7. All claims that commoditisation of content will  ease because some content players have re-enacted the parable of King Canute (or Cnut, or Knut – when you have Danish kings you have to live with constant variation).  Google, at a stroke, is now a provider of primary law globally.  If law publishers have any idea of where the value chain is they need to be climbing it to safety with the speed of Canute’s courtiers saving him from the incoming tide.
  8. Any continuing claims that you can move the brand of a trade magazine to the network without fundamentally altering its role or its customer relationships, and that brand values will enable it to survive.  The network is a service zone, not a product promotion space.  We have spent a decade learning this and surely we do not have to go through it all again in 2010?
  9. Anyone who says that customer-created content does not work.  Now that our financial services operators fully recognize their role as value re-cyclers and aggregators, there is no excuse for the rest of the class.
  10. Anyone who proclaims the arrival of a new age and names it web 3.0 , 4.2 or X marks the spot.  We are working within a new continuum, every technology we will use in the next 15 years has already been invented and patented, and what remains to be seen is only the way in which consumers react to which combinations of hardware/software/content to solve which problems in what contexts. And nothing is lost by experimentation.

If we are all unfazed by the the tendency of the market to create smoke and erect mirrors, then we can get on with the real game.  As in every year from 2000 to 2010, clever and knowing players, whatever they call themselves, will make real money in information markets.  I hope you are one.  Happy New Year from the bottom of the Garden!

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