Three Book Publishers Settle with Justice Dept.; Two, Plus Apple, Fighting Suit
Simon & Schuster, Hachette Book Group and HarperCollins have settled with the U.S. Justice Dept., which filed a civil antitrust suit alleging collusion on pricing of e-books among five publishers and Apple. PW article spells out basics of the terms, which include canceling current agency-model agreements with Apple and refraining for two years from limiting any retailer’s ability to set e-book prices to the consumer. In addition, settling publishers must institute compliance measures including appointing an “antitrust compliance officer” and allowing DOJ to inspect their ledgers, data etc. All of the publishers have denied any wrongdoing. Amazon hailed the settlement, and immediately said it would resume discounting (see NYT piece). Macmillan, Penguin and Apple did not settle, are presumably on track to face the government in court, and reportedly will argue that agency pricing agreements actually enhance competition within the e-book industry. (Macmillan CEO statement included in L.A. Times piece.) NYT: Publishers, book sellers, authors argue Amazon will now have a monopoly that will ultimately hurt consumers. In addition, 16 states, led by Connecticut and Texas, filed their own suit Wednesday against Apple, Macmillan, Penguin and Simon & Schuster. The states said they have reached tentative settlements with HarperCollins and Hachette; Connecticut’s AG said those two publishers have agreed in principle to provide more than $51 million in restitution to e-book buyers. WSJ reports that a private class-action suit pending in New York could involve triple damages; and that Macmillan is among four publishers (and Apple) proposing to settle a European probe.
Meredith News: Eating Well to Increase Rate Base Again; New Extensions Expand Brands’ International Reach
After upping its rate base to 500K (from 250K) in January, Meredith’s Eating Well will raise it again as of its Sept./Oct. issue, to 600K. “This growth reflects how relevant and engaging our content is to consumers who want to make healthy eating a bigger part of their life,” said EW publisher Tony Catalano. Separately, Meredith Corp. announced overseas brand expansions. In Europe, these include the launch of Sunny 7 (a network for adult women integrating content from several Meredith magazine brands across digital/social media) by Vienna-based Liquid 7; and the launch of a Hungarian-language quarterly edition of Diabetic Living by Budapest-based Hamu es Gyemant, being distributed by newsstand/subs in Hungary and other central/eastern European countries. Also, Athens-based Democratic Press has launched a Greek edtion of Diabetic Living. In the Middle East, Riyadh-based Saudi Specialized Publishing Co. will launch localized, English-language editions of Parents and Better Homes and Gardens for the Gulf State markets. In Asia, Manila-based Summit Media will add content from American Baby to its locally-published Smart Parenting brand.
Folio: (Eating Well rate base increase)
Meredith release (international expansion)
Key Category Cutbacks Hurt Magazines’ Q1 Ad Performance
Collective ad pages for Publishers Information Bureau (PIB) magazines were down 8.2% in Q1 (ad revenue -4.2%). Big page impacts were seen in automotive (-35.8%), food (-17.8%), retail (-7.4%), drugs/remedies (-7.3%). The two positive categories were apparel/accessories (pages +6.3%) and toiletries/cosmetics (pages +2.5%). Auto’s pullback translated into a 765-page reduction; food and drugs/remedies pages declined by 420 and 230 pages, respectively. Performance by category varied by title, reach/efficiency. Meredith EVP/president media sales Dick Porter said company did well with food advertising in Q1 (see above re Eating Well), and that in automotive, vertical pubs are likely to continue to get largest share of ad spend.
Conde Nast News: Movie/TV/Video Division Hires Execs; ZipList Acquired
Fledgling entertainment division, headed by former CW network president Dawn Ostroff, named Jeremy Steckler EVP-motion pictures and Michael Klein EVP-alternative programming. Steckler was EVP-production at Imagine Entertainment; Klein was SVP-programming/development at the Sundance Channel. Walt Disney Co. veteran Jeffrey Thompson had previously been named VP-business development for the new Conde unit. Separately, Conde announced that it has acquired recipe-clipping app ZipList (reportedly for $14M); president Bob Sauerberg said goal is to build ZipList as an independent company while collaborating with our food brands to integrate its core technology, and to create partnerships that allow other companies to do the same.”
Ad Age (entertainment unit)
PaidContent (ZipList acquisition)
Hearst U.K. Unveils New, Tablet- and Newsstand-Friendly Women’s Magazine
Good Ideas, launched in both print and digital format, produced by same editorial/design team as Good Housekeeping. Tablet version specially designed for that platform, with shorter articles, more visuals, smartphone-friendly typefaces, interactive TOC. Print version similarly designed to have newsstand appeal. Initial print run is 150K; 300K sample digital editions being made available for free download on Apple Newsstand. Title targets women 35 to 50; aims to cover “everything that is quick, easy and affordable” in the areas of fashion, food, homes and gardens, consumer issues and finance.
NYT Reviews Next Issue Media App
Reviewer writes that magazines within the app vary quite a bit in operation; lists innovative features and limitations; analyzes the pricing proposition for the consumer vs. print subs. Separately, a DigiDay writer maintains that magazine apps by and large fail to leverage the unique capabilities possible on the iPad, and that many are less reader-friendly than print.
VSS Forecasts 5.7% Media Growth
Overall communications spending by consumers, marketers and institutions is expected to reach $1.419 trillion by 2015, giving it a compound annual growth rate of 5.7%, vs. projected CAGR of 4.4% for GDP over same period, according to new forecast from Veronis Suhler Stevenson. Reason: higher growth rates for digital, which is benefiting all content-based segments. In 2012, consumer magazine and consumer book industry growth projected at 0.8% and -2.2%, respectively. Pure-play consumer Internet/mobile services projected to grow 18.1%.
Cloud Service Helps Publishers Turn Digital Magazines Into Print
Service targeted to smaller publishers. Digital publishing platform Issuu has tapped Peecho as print publishing partner. Issu users can use a Peecho cloud print button that takes them to an online interface where print specs can be set. Peecho then combs its networked database of Publisher partners to find lowest price for producing print version.
Tumblr Intros Spotify’s Music Player, Prepares More New Tools
OTHER NEWS OF NOTE:
Albertsons LLC to Close 13 Florida Stores
Also closing limited-line distribution center; four Florida stores continue to operate. 12 stores to begin liquidation sales May 9 and close around June 9; Key West store, reportedly to be sold to Publix Super Markets, has started liquidation sale and scheduled to close on April 28. 1,100 affected employees can apply for positions in Albertson LLC’s stores outside Florida. After closings, the retailer will operate 192 units in Arizona, Arkansas, Colorado, Florida, Louisiana, New Mexico, Texas and Utah.
Earth Fare Sold to Oak Hill
Oak Hill Capital Partners has acquired an 80% ownership stake in Earth Fare, in move said to prepare the 25-store natural food chain for “next phase of growth.”
Rite Aid’s Losses Narrow in Q4
Reports loss of $161.3 million, or 18 cents a share, from year-earlier loss of $205.7 million, or 24 cents a share. Extra week of sales, tax benefit contributed; total sales up 11%, same-store up 3% (best showing in five years). Projects comp sales growth of 1.5% in current fiscal, and a per-share loss of 13 cents to 31 cents on revenue of $25.4B and $25.8B. Analysts polled expected loss of 25 cents and revenue of $25.74B.
Target Canada Entry Driving Wal-Mart Moves, Union Protests
In advance of Target’s entry in the Canadian market next spring, Wal-Mart has put an aggressive expansion plan in motion, and is expected to become even more aggressive about pricing. Separately, the UFCW is running an aggressive public campaign, including billboards in major markets, to change its stance that current Zellers employees, union and nonunion, will have to reapply for jobs when it takes over those stores.
Montreal Gazette (Wal-Mart)
Windsor Star (union campaign)
OTHER NEWS OF NOTE:
Supervalu’s Cub Pharmacy to Join UnitedHealth Group Diabetes Alliance