March 14, 2011

US Postal News Despite reports, Postal Service not cutting 30,000 jobs...... 1 /Directory Industry News Espresso Book Machine, Xerox partnership gives hope to on demand...... 2 Report Excerpt: E-book device popularity changing ...... 3 Catalog/Retail Industry News March Consumer Reports Index sign of economic improvement ...... 4 Retail container traffic to be up 11 percent in March...... 4 Walmart raises dividend ...... 5 Magazine Industry News Hefner succeeds in bid to take Playboy private...... 6 Tina Brown reveals new Newsweek Magazine...... 6 Entertainment Weekly to partner with GetGlue.com ...... 6 Meredith Corporation launches social commerce network...... 8 Bloomberg Businessweek signs new licensing agreement in China ...... 8 Hearst Magazines ‘optimistic’ about resolving dispute with Apple...... 9

ECONOMIC UPDATE GDP: (Revised) 2.8% in Q4 2010 (up from 2.6% Q3 2010) (Next Release March 25) Unemployment Rate: 8.9% in February 2011 (down from 9.0% in January) Consumer Confidence: 70.4 in February 2011 (up from 64.8 in January)

US POSTAL NEWS

Despite reports, Postal Service not cutting 30,000 jobs (The Washington Post – March 10, 2011) Original Link: http://voices.washingtonpost.com/federal-eye/2011/03/despite_reports_postal_service.html

Some misleading news reports published Wednesday suggested the U.S. Postal Service is slashing 30,000 positions by the end of September. Not so, according to postal officials.

Postmaster General Patrick R. Donahoe will formally unveil plans to cut 7,500 jobs by the end of the month -- reductions expected to focus primarily on administrative positions and postmasters.

In an interview earlier this week, Donahoe suggested USPS would likely see the departure of about 30,000 total employees this year, because 22,500 of them retire or leave the agency on average each year. (So do the math: 7,500 expected job cuts plus 22,500 retirements/departures equals 30,000 total departures.)

In turn, two trade publications (that The Eye reads regularly and admires) incorrectly characterized Donahoe's statements as meaning that he was ordering the elimination of 30,000 jobs.

1 Postal officials privately concede however that many more workers may leave this year in order to avoid potential layoffs or a more perilous financial condition in the coming years.

In response to declining mail volume, the Postal Service has cut more than 230,000 positions in recent years by implementing hiring freezes, offering early retirement packages or through attrition.

Negotiations with two of its largest unions -- the American Postal Worker Union and the National Rural Letter Carriers Association -- are ongoing.

BOOK/DIRECTORY INDUSTRY NEWS

Espresso Book Machine, Xerox partnership gives hope to on demand (Book Publishing Report – March 8, 2011) Original Link: http://www.bookpublishingreport.com/content/espresso-book-machine-xerox-partnership- gives-hope-demand

The history of e- can best be viewed by looking at the gulf between the intent of technology and the usefulness of technology. That gulf was rather wide in 1998, when a company called SoftBook press released a dedicated reading device that could store 1,500 and boasted a whopping five hours of battery life. Once Sony released their reader and a slew of inexpensive gadgets followed, the gulf became nonexistent—and we can look at the SoftBook device as a gadget ahead of its time. Years from now, when we look at Print-on-Demand, we can only guess whether the technology of today will be deemed closer to the SoftBook or the iPad.

On Demand Books—which most of us know as the creator of the Espresso Book Machine—partnered with Xerox last month and is offering the machine as “A Xerox Solution” to independent bookstores, college bookstores and other singular entities—even cruise ships—“rather than Books-A-Million or Barnes & Noble,” John Connelly, vice president of publishing for Xerox, told BPR.

The Espresso Book Machine is familiar to most of us as the hypnotic copier-on-crack seen at Book Expo America each year, but Connelly hopes the presence of Xerox will enable ODB to make the machine more common with a variety of service and financing options—and of course the credibility of the Xerox brand name. “[Both Xerox and ODB] have this vision of having content ubiquitously available on a global basis,” said Connelly, echoing the mission statement of companies like Google and . “Physical print isn’t going away, but the distribution model needs to change.”

Connelly wouldn’t specify sales targets or current sites using the product, but he indicated there are some already producing 2,000 books per month from a machine that fits in a 10’ by 15’ space. The content being printed, which is delivered from ODB, is entirely softcover and includes over four million titles—many of which are Google titles as well as what Connelly describes as “a huge amount” of self published works, since a good number of authors still want a physical product to hold instead of (or in addition to) a title from 2 Amazon’s CreateSpace or Barnes & Noble’s PubIt! (“Was it less expensive [than publishing online]? No. But was it more satisfying for the author? Yes,” said Connelly).

Report Excerpt: E-book device popularity changing (Book Publishing Report – March 10, 2011) Original Link: http://www.bookpublishingreport.com/content/report-excerpt-e-book-device-popularity- changing

Amazon’s endless marketing campaign and empty bragging about the Kindle may be creating a self- fulfilling prophecy among e-book users: as a hardware group (there are now several versions of Amazon’s Kindle available today) the Kindle devices have surged in Simba’s proprietary analysis of e-book platforms, available in the upcoming edition of Trade E-Book Publishing.

Beginning in mid 2010, the report series from Simba began to initiate surveys on a quarterly basis as opposed to annually. While keeping the survey nationally representative (and, even more importantly, not specifically targeting people we know already buy books) we’ve been able to add or subtract device choices and otherwise tweak the questions to bring more analysis to the ever-changing e-book universe. For instance, when the iPad was finally released in May of last year, we were quickly able to not only add it as a survey option, but also figure out where the device sat with e-book consumers. As it turns out, our preliminary estimate that about a third of iPad owners don’t read e-books was a little conservative: as our February 2011 survey found, about two in five iPad owners do not read e-books.

But Amazon’s Kindle has always had its own row in the ‘check all that apply’ portion of the hardware survey and the first year of analysis, the response rate for the Kindle was so low we had to combine it will all other devices (that were not a PC or a Mac) in order to get a valid result. Combining the three 2010 surveys shows about 24% of e-book users have read at least one e-book on an in the previous three months. In comparison, when looking at the February 2011 data, the number of adults who admit to using a Kindle hardware device over the previous three months had reached 39%. Meanwhile, the personal computer (which, for as long as Simba has conducted this survey, has been the most popular piece of hardware on which a consumer reads an e-book) had 36%—a big drop from the 68% of consumers who said the same in February 2010—though, when the three 2010 surveys are combined, the PC is still on top of Amazon at 62%.

The champagne shouldn’t pop at Amazon’s headquarters just yet: according to our 2011 findings, other devices (including Barnes & Noble’s Nook and ) have made a whole lot of gains in a very short period of time, and the February 2011 findings may be slightly biased for Amazon because of the timing. As we’ve noted in earlier issues of BPR, a good number of adults bought an e-reading device for someone else over the holiday season and the first quarter of the new year brings e-book users into the market in a big way as they buy up some content to get started.

We’ve noticed enough trends in this market to determine that the PC’s once formidable lead as a hardware device has been falling rapidly and the adults who had once used the PC to consume e-books are switching to other devices including the Kindle. But as we’ll show in Trade E-Book Publishing 2011, there’s a whole lot more happening in the hardware space.

3 CATALOG/RETAIL INDUSTRY NEWS

March Consumer Reports Index sign of economic improvement (Retailing Today – March 8, 2011) Original Link: http://retailingtoday.com/article/march-consumer-reports-index-sign-economic-improvement

In another positive sign for the economy, the March Consumer Reports Index reveals its most positive results in two years.

According to Consumer Reports National Research Center, which conducts the survey, the Consumer Sentiment Index has broken into positive territory at 50.3, which is up from 48.7 a month ago. This is the first time sentiment has been in positive territory since it was first measured in October 2008.

Driving the gain in consumer sentiment, the Consumer Reports Trouble Tracker Index, which is the measure of the financial difficulties faced by consumers, fell sharply to 44.8, down nearly 10 points from the prior month (58.7). The Trouble Tracker Index is now at its lowest level since it was first reported in April 2008. Declines were evident for a wide range of reported financial difficulties in the past 30 days.

The Consumer Reports Stress Index, a measure of the stress consumers feel in their everyday lives versus a year ago, is also down slightly in March to 58.7 from 59.3 the prior month, though it is up from the prior year (57.7). The survey results about consumer spending still have not shown the same optimism.

"The March index provides the most encouraging results that we have seen since we started the index more than two years ago," said Ed Farrell, a director of the Consumer Reports National Research Center. "Consumers may be feeling that they are finally makes strides in the right direction when it comes to their financial well-being."

After remaining locked at 49.2 for the past three months, the Consumer Reports Employment Index is up slightly to 49.7, and is also up versus one year ago (48.7). Weak job growth remains the core problem with employment. The improvement in the Employment Index this month was the result of a drop in job losses in the past 30 days (5.3%) versus the prior month (6.7%); however job creation remains weak, with 4.6% starting a new job in the past 30 days, down slightly from the prior month (5.2%).

Retail container traffic to be up 11 percent in March (National Retail Federation – March 7, 2011) Original Link: http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=1094

Import cargo volume at the nation’s major retail container ports is expected to be up 11 percent in March over the same month last year, according to the monthly Global Port Tracker report released today by the National Retail Federation and Hackett Associates.

“These numbers show solid increases over last year and are evidence that our nation’s economic recovery is continuing to build momentum,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “Increases in imports are a clear sign that retailers expect sales to continue to climb in the next several months.”

4 U.S. ports followed by Global Port Tracker handled 1.2 million Twenty-foot Equivalent Units in January, the latest month for which actual numbers are available. That was up 5 percent from December and 12 percent from January 2010. It was the 14th month in a row to show a year-over-year improvement after December 2009 broke a 28-month streak of year-over-year declines. One TEU is one 20-foot cargo container or its equivalent.

February, traditionally the slowest month of the year, was estimated at 1.12 million TEU, which would represent an increase of 12 percent over February 2010. March is forecast at 1.19 million TEU, up 11 percent from a year ago; April at 1.24 million TEU, up 9 percent; May at 1.32 million TEU, up 5 percent; June at 1.39 million TEU, up 5 percent; and July at 1.45 million TEU, up 5 percent.

The first half of 2011 is forecast at 7.5 million TEU, up 9 percent from the first half of 2010. For the full year, 2010 totaled 14.7 million TEU, a 16 percent increase over 2009. Last year’s percentages were high because 2009’s 12.7 million TEU was the lowest level seen since 2003.

Hackett Associates founder Ben Hackett said recent political turmoil in Egypt, Libya, Tunisia and elsewhere is driving up oil prices and will likely increase shipping costs.

“Oil supply is going down as a number of nations have dropped out of the production cycle,” Hackett said. “Freight rates have been decreasing but that will not last long as fuel costs are factored in.”

Global Port Tracker, which is produced for NRF by the consulting firm Hackett Associates, covers the U.S. ports of Long Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Hampton Roads, Charleston and Savannah on the East Coast, and Houston on the Gulf Coast. The report is free to NRF retail members, and subscription information is available at www.nrf.com/PortTracker or by calling (202) 783-7971. Subscription information for non-members can be found at www.globalportracker.com.

As the world's largest retail trade association and the voice of retail worldwide, NRF's global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the United States and more than 45 countries abroad. In the United States, NRF represents the breadth and diversity of an industry with more than 1.6 million American companies that employ nearly 25 million workers and generated 2009 sales of $2.3 trillion. www.nrf.com

Hackett Associates provides expert consulting, research and advisory services to the international maritime industry, government agencies and international institutions.

Walmart raises dividend (Retailing Today – March 4, 2011) Original Link: http://www.retailingtoday.com/article/walmart-raises-dividend

Walmart said Thursday that it is increasing its annual dividend 21% on the back of strong earnings.

The retailer last month reported a 27% increase in fourth-quarter net income as it benefited from cost- cutting and strong international sales. Walmart said it will pay an annual dividend this year of $1.46, up from $1.21. It will pay quarterly dividends of 36.5 cents in April, June, September and January in fiscal 2012, which ends Jan. 31. 5 The next dividend will be paid on April 4 to shareholders of record on March 11.

Walmart president and CEO Mike Duke said the company was able to boost its dividend because of its earnings performance in fiscal 2011 and its strong financial position.

MAGAZINE INDUSTRY NEWS

Hefner succeeds in bid to take Playboy private (Yahoo – March 4, 2011) Original Link: http://finance.yahoo.com/news/Hefner-succeeds-in-bid-to-apf-1452196284.html?x=0&.v=3

A partnership led by Hugh Hefner has succeeded in taking Playboy private.

Playboy Enterprises Inc. said Friday that its acquisition by Hefner's Icon Acquisition Holdings LP has closed.

The $6.15-per-share deal was funded with $195 million of debt and $185 million from the private investment firm Rizvi Traverse and Playboy management, including Hefner.

Under the deal, Rizvi Traverse will own about 60 percent of the company. Hefner will own about 37 percent, and other executive management will have the remaining 3 percent.

Hefner remains editor-in-chief and chief creative officer of Playboy.

The racy magazine Hefner launched in 1953 was most popular back in the 1970s. It has struggled to lure readers and advertisers as adult content on the Internet bloomed. Falling revenue has forced several rounds of layoffs since 2008.

Tina Brown reveals new Newsweek Magazine (Abcnews.com – March 6, 2011) Original Link: http://abcnews.go.com/Politics/tina-brown-reveals-newsweek-magazine-abcs-week- christiane/story?id=13068817

Tina Brown revealed the first look at the newly redesigned Newsweek magazine this morning on "This Week with Christiane Amanpour."

The new cover features United States Secretary of State Hillary Clinton in the magazine's special edition, "150 Women Who Shake the World."

Brown, who previously captained Vanity Fair and the New Yorker magazines, took over the flailing news- weekly in November when it merged with her , The Daily Beast, which launched in October 2008. Brown is now the editor in chief of both the Daily Beast website and the new Newsweek.

6 Newsweek, the 77-year-old magazine that fought neck and neck for decades with Time magazine for dominance in the once-lucrative news-weekly magazine market, has struggled financially in recent years along with many other once-dominant publications.

Last May, the magazine's longtime owner, the Washington Post Company, put it up for sale. 92-year-old mogul and philanthropist Sidney Harman bought Newsweek and lured Brown to the top spot.

Although Brown is one of the most highly respected magazine editors in the world, her legendary 35-year career has not been without the occasional disappointment, such as the much-heralded but short-lived Talk magazine - which also featured Hillary Clinton on the front cover of its first issue. Breathing new life into Newsweek will be perhaps her greatest challenge.

Brown, also the author of "The Diana Chronicles," a biography of the late Diana, Princess of Wales, moved to America from her native Britain to edit Vanity Fair and later become a US citizen.

Later this month Brown will be hosting the second annual Woman in the World Summit in New York City, an invitation-only event that will bring together powerful people across multiple disciplines.

Speakers will include former President Bill Clinton, Melinda Gates, New York City mayor Michael Bloomberg, and Secretary of State - and Newsweek cover girl - Hillary Clinton, among others.

Entertainment Weekly to partner with GetGlue.com (Folio – March 7, 2011) Original Link: http://www.foliomag.com/2011/entertainment-weekly-partner-getglue-com#

Entertainment Weekly announced its partnership with GetGlue.com, an entertainment-based social network.

When users check in with items on EW’s “Must List” through GetGlue.com, they will be given access to virtual and physical stickers. These stickers are then used to access exclusive content from Entertainment Weekly editors.

Once obtained, users can share these stickers with friends via Twitter and Facebook. Consecutive weekly visits to the “Must List” will result in additional stickers with a different set of rewards.

EW’s “Must List” is a top 10 recommendation list of what’s hot in the entertainment sector which is updated weekly.

This is the first publishing partnership for GetGlue.com, a site for users to rate and “check-in” with television shows, movies, music and books. Users create personal profiles and are able to view what friends are “consuming” in real-time. The site also provides users with suggestions tailored to personal taste based on user behaviors.

Alex Iskold, CEO and founder of GetGlue.com, says, "The check-ins and stickers will provide a perfect mix for fans to stay up to date on the latest trends and to unlock exclusive rewards."

7 Meredith Corporation launches social commerce network (Folio – March 9, 2011) Original Link: http://www.foliomag.com/2011/meredith-corporation-launches-social-commerce-network#

Meredith Corporation launched a new social commerce network on Parents.com today.

Found at http://deals.parents.com/national, the network will offer Meredith subscribers social networking, as well as group buying, opportunities. Meredith Corporation also launched a “Premium Partner Program,” supplying select vendors with exclusive opportunities to reach subscribers through the social commerce network. Members that are considered “Premium Partners” will be placed for maximum exposure within the new network.

Meredith Corporations partners with Group Commerce Inc. in the new network.

David Rosenblatt, the chairman of Group Commerce Inc., says, “Meredith’s significant subscriber base will realize significant value from this new network through great buying discounts and an enhanced social buying experience.”

In January 2009, the Meredith Corporation launched the Meredith’s Women Network, a portal for women’s from Meredith’s portfolio including Better Homes and Gardens, Parents and The Real Girls Network. 15 million unique visitors visit the Women’s Network each month.

Bloomberg Businessweek signs new licensing agreement in China (Audience Development – March 9, 2011) Original Link: http://www.audiencedevelopment.com/2011/bloomberg+businessweek+signs+new+licensing+agreement+c hina#

Bloomberg Businessweek will has signed on with a new licensing partner in the People's Republic of China. Modern Media Holdings Limited will manage the brand.

The Chinese version of the magazine will remain at its 150,000 circ for now, says a spokesperson, and will include content produced by Bloomberg's 2,300 worldwide journalists, which include 100 based in China. Some "locally-focused" business and financial content will be produced by Modern Media Holdings.

According to the spokesperson, Modern Medial Holdings was chosen because "they're a forward-looking, publicly-traded company that we want to be associated with."

The global edition of the magazine saw a 67 percent year-over-year increase in ad pages through February, per PIB, and 37,000 new subscribers in the second half of 2010, according to ABC.

"We have a long-term commitment to doing business in China and look forward to working with a recognized leader who will produce a high quality product and extend our reach in this important market," said Bloomberg Businessweek president Paul Bascobert in a statement.

8 Hearst Magazines ‘optimistic’ about resolving dispute with Apple (Bloomberg – March 9, 2011) Original Link: http://www.bloomberg.com/news/2011-03-09/hearst-magazines-optimistic-about-resolving- dispute-with-apple.html

David Carey, president of Hearst Magazines, said he’s “optimistic” that major publishers will be able reach an agreement with Apple Inc. (AAPL) about selling subscriptions for the computer maker’s iPad tablet.

Hearst Magazines, a unit of New York-based Hearst Corp. with more than 200 titles around the world, is among the big publishers trying to reach an agreement with Apple. Carey said he is concerned about getting access to information about people who subscribe to his company’s magazines on the iPad.

“I don’t think the publishing industry and Apple are on the same page relative to the data discussion,” said Carey at the Bloomberg Media Summit in New York. “We do not want to be disconnected from who the subscribers are. I’m going to be optimistic that the big publishers and Apple will find a way to work together.”

Hearst’s 14 U.S. titles include Cosmopolitan, Esquire, and O: The Oprah Magazine.

Apple last month started a subscription service for publishers of newspapers, magazines and other content applications. News Corp. (NWSA) is offering subscriptions to the Daily, its new digital-only news publication, through Apple.

Apple has refused to release some consumer information to publishers for customers who buy subscriptions directly through its App Store, which has been a sticking point for some publishers, including the closely held Hearst and Time Warner Inc. (TWX)’s magazine group, Time Inc.

Data Questions “The big questions revolve around data,” Carey said. “This is true of all the new platforms that are coming out. Who owns the customer?”

One possible solution, Carey said, will be for publishers to create “bespoke,” or custom-created publications for Apple instead of making their existing products available on the iPad. With that approach, similar to News Corp.’s the Daily, publishers can avoid losing access to data about consumers of their existing products, he said.

“I think our company and other companies are looking at exactly that,” Carey said.

“Our subscription service is available to publishers of content-based apps on the App Store, including magazines and newspapers,” Apple spokesman Tom Neumayr said. “We believe this is a great opportunity for publishers to expand digital access to the content.”

Carey said there’s a promising future for tablet computers and electronic readers, such as Barnes & Noble Inc. (BKS)’s Nook.

9 He said he could “imagine the day that 20 to 25 percent of circulation” would come from selling magazines on tablet formats.

10