2. Introduction
Michael Cairns is a publishing and media executive with over 25 years experience in
business strategy, operations and technology implementation. As a business
executive, Mr. Cairns has successfully managed several troubled and under-
performing businesses, creating new business opportunities, developing new funding
sources and enhancing shareholder value for investors. His years spent as an
operating executive have largely been with brand-name publishing companies such
as Macmillan, Inc., Berlitz International, Wolters Kluwer Health, Reed Elsevier and
R.R. Bowker. As a consultant, Mr. Cairns has worked with clients as diverse as
AARP, Hewlett Packard, InterPublic Companies and Reed Elsevier with an emphasis
on business strategy, market development and corporate development.
His skills and experience include:
Business and corporate strategy development and implementation
Operations management and business transformation
Traditional and digital publishing and operations
Print-to-digital transformation and adoption of new business models
Software development and software services
Mr. Cairns holds an MBA (Finance) from Georgetown University and a BA from
Boston University. He has served on several boards and advisory groups including
the Association of American Publishers, Book Industry Study Group and the
International ISBN organization. Additionally, he has public and private company
board experience.
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Michael Cairns
Information Media Partners
Strategy Consulting
New York, London, Melbourne
Tel: 908 938 4889
Michael.cairns@infomediapartners.com
Find me:
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3. Information Media Partners
Michael Cairns established Information Media Partners in 2006 as a boutique strategy
consulting firm focused on the information and education publishing segment. The work
conducted by the firm includes product development, corporate development, sales
management and corporate reorganizations. We work with established businesses, private
equity owners and potential acquirers.
Examples of our work include:
Reorganized and re-focused a $25 million software publishing company by aligning
business operations with client priorities; implementing internal collaboration tools and
project management standards; re-building executive team to focus on effective and
efficient management
Defined a new business strategy for a large non-profit association and advocacy group,
expanding their business model into global markets to exploit their core knowledge and
expertise across a broader market
Led an information technology capabilities review at a large international advertising
holding company. Completed over 200 interviews in 15 international offices and multiple
group focus sessions to define the operational ‘gaps’ between existing agency capabilities
and those necessary and important for client delivery by region
Completed a sales management effectiveness review for a global software company and
defined six key project initiatives to improve sales effectiveness, market development and
account management
We approach our client engagements in a standardized, logical manner which creates the best
environment to identify key business drivers, administrative and logistical road blocks and/or
product or market definition issues. Our investigative approach leads to better insights into
your businesses and supports the development of workable solutions and recommendations
for success.
Visit the Information Media Partners website for more information.
Sample Client List
4. Introduction and Agenda
Industry Overview
Global Trends
Academic & Educational Publishing
STM market
Traditional Textbook market
Channel Discussion
Business Drivers & Trends
Summary & Discussion
5. Agenda and Discussion Items
An overview of the typical stm/academic ecosystem
- production, channels, business models etc. and the
typical companies at each stage
Breakdown of typical STM income streams
Typical hierarchy – who are the decision makers?
Poor data/technical/other areas that present
opportunity
Overview of Bowker/Nielsen and other data services
Investigate business models
Areas of strengths/weaknesses
Opportunities: Competitors vs partners?
6. “Publishing” is a lot of things
Outsell:
Our industry of information,
media and technology is a
blend of fast-growing
software, services, tech
companies, moderate
growth traditional content
publishers and media. Hot
spots continue to be data-
intensive businesses and
platform solutions
providers for fully
integrated content,
software, services and
workflows on any device,
anywhere around the
world.
Source: Outsell
7. Together, the top six largest book markets account for
approximately 60% of the value of global publishing
USA
26%
China
12%
Germany
8%Japan
7%
France
4%
UK
3%
Other
40%
Compiled by RWCC for the International Publishers Association (IPA)
8. Publishing could be considered the largest segment of
the global content and entertainment industry
Publishing
30%
Movie/Entertainment
26%
Magazines
21%
Video Games
13%
Music
10%
Compiled by RWCC for the International Publishers Association (IPA)
9. Global ranking of top 30 publishers
Rank
(2013)
Publishing Company
(Group or Division)
Country Parent Corporation or Owner Country of Parent
2013 Revenue in
$M
2012 Revenue in
$M
1 Pearson UK Pearson UK $9,330 $9,158
2 Reed Elsevier UK/NL/US Reed Elsevier UK/NL/US $7,288 $5,934
3 Thomson-Reuters US The Woodbridge Company Ltd. Canada $5,576 $5,386
4 Wolters Kluwer NL Wolters Kluwer NL $4,920 $4,766
5 Random House Germany Bertelsmann AG Germany $3,664 $3,328
6 Hachette Livre France Lagardère France $2,851 $2,833
7 Holtzbrinck Germany Verlagsgruppe Georg von Holtzbrinck Germany $2,222 $2,220
8 Grupo Planeta Spain Grupo Planeta Spain $2,161 $2,597
9 Cengage* US Apax Partners et al. US/Canada $1,993 $1,993
10 McGraw-Hill Education US The McGraw-Hill Companies US $1,992 $2,292
11 Scholastic US Scholastic US $1,792 $2,148
12 Wiley US Wiley US $1,761 $1,783
13 De Agostini Editore* Italy Gruppo De Agostini Italy $1,724 $1,724
14 China Publishing Group China (PR) Government; partly publicly listed China (PR) $1,499 $1,104
15 Houghton Mifflin Harcourt US Houghton Mifflin Harcourt Publishing US/Caymans $1,379 $1,286
16 HarperCollins US News Corporation US $1,369 $1,189
17
Springer Science and
Business Media
Germany EQT and GIC Investors
Sweden,
Singapore
$1,301 $1,298
18 Oxford University Press UK Oxford University UK $1,254 $1,125
19 Shueisha Japan Hitotsubashi Group Japan $1,191 $1,464
20 Informa UK Informa plc UK $1,185 $1,126
21 China Education and Media China (PR) China Education and Media Group China (PR) $1,152 $702
22 Kodansha Japan Kodansha Japan $1,143 $1,368
23 Egmont Group Denmark/Norway Egmont International Holding A/S Denmark $1,101 $792
24 Grupo Santillana Spain PRISA Spain $1,020 $985
25 Shogakukan Japan Hitotsubashi Group Japan $1,011 $1,254
26 Bonnier Sweden The Bonnier Group Sweden $976 $968
27 Kadokawa Publishing Japan Kadokawa Holdings Inc. Japan $900 $1,000
28 Simon & Schuster US CBS US $809 $790
29 Klett Germany Klett Gruppe Germany $622 $604
30 Woongjin ThinkBig Korea Woongjin Holding Korea $616 $667
Source: Bookseller & Publisher’s Weekly
11. Book publishing will remain fairly flat with professional and
educational books growing slightly faster than consumer books
0
20
40
60
80
100
120
2015 2016 2017 2018 2019 2020
Consumer and educational books revenue (US$mm, 2015-2020
Consumer Books Revenue Educational Books Revenue
Source: Global entertainment and media outlook 2016-2020, PwC
12. Snapshot of the US consumer market
Source: AAP, Veronis Suhler, Nielsen, Barnes & Noble
13. Trade book market share by format
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2013 2014 2015
Other eBook Audio Paper & Mass Market Board Books Hardback
Source: AAP Annual Survey
16. E-book revenues will gain market share marginally at the
expense of mass market and paper formats.
0
10
20
30
40
50
60
70
80
90
100
2015 2016 2017 2018 2019 2020
Print and electronic books revenue (US$mm), 2015-2020
Print Book Revenue Electronic Book Revenue
Source: Global entertainment and media outlook 2016-2020, PwC
17. Market share of overall US ebook unit sales by retailer
Amazon.com
Apple Books B&N Nook
Kobo US
Google Play
Other
Source: Author Earnings
18. Market share of e-book unit sales in Kindle store
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Feb-14 May-14 Jul-14 Oct-14 Jan-15 May-15 Sep-15
AAP-Reported Traditionally Published Non-AAP Reported Traditionally Published
Amazon Imprint Published Indie Published
ISBN-Bearing Indie Books Non-ISBN "Shadow Industry" Indie Books
Column1
Source: Fortune Magazine
19. Global trends
Digital growth has returned global consumer
books revenue to expansion beginning in 2013
Educational publishers continue to invest heavily
in digital publishing
China, India, markets expected to enter era of
fast, expansive growth in next five years with
global impact
Consumer, Professional and Education market
continues to be significantly concentrated and
siloed
20. Key segment business drivers
Consumer
Author block
busters
Technology –
Products
Technology –
Distribution
Retail stability
Battle for
‘attention’
Professional
Open access
Library budgets
Government
investment
Workflow
applications
Technology
innovation
Globalization of
research
Education
Open content models
Government policy
Local & state policy
For profit schools
Enrollments
Economy
Technology
Learning Analytics
Competency Based
Education
Learning Management
Next Generation Learning
Materials
21. Snapshot of US education market
Source: University Business
25. The big four journal publishers
0
500
1000
1500
2000
2500
3000
3500
Elsevier Springer Wiley Taylor & Francis Macmillan
In merging with Springer, Macmillan joins forces with one of
the world’s largest scholarly publishers.
Source: Nature Publishing Group
34. Percentage split of textbook sales revenue
Manufacturing Cost
28%
Marketing Cost
14%
Royalty
11%
College Store
Personnel
20%
Publisher Overhead
9%
College Store Overhead
7%
Publisher Profit
6%
College Store Profit
4%
Freight
1%
Source: National Association of College Stores
35. 1980s:
corporatization of
campus bookstores
Increased
sophistication of
second hand market
2000s
Internet market
expansion
Content availability
Rental market
Textbook prices have risen faster than CPI
Results: shorter review cycles, higher prices, lower volume
36. Trends in education - Students
“just in time” course materials, credentialing,
skills development for business/career
development
Driving non-traditional delivery methods
Open source content is becoming mainstream –
distinct threat to incumbent publishers.
37. Trends in education - Institutions
Expansion of ‘for profit’ schools
Vast investment funds outside traditional education
marketplace
Institutional online strategy
Adaptive learning, assessment, intervention driving
‘outcomes’
Institutions providing services – alumni, jobseekers
Online courses becoming core delivery method on
and off campus
Publishing programs: open educational materials
38. Trends in education - Publishers
Pressure to provide digital products:
textbooks, enhanced textbooks, tools, platform,
integration(s), etc.
Publishers providing services to institutions
Staff recruitment, training, operations support,
Changing staffing composition within publishing
companies
Content development ‘off-shoring’
Distribution landscape more complicated: Learning
management systems, eContent distribution, etc.
“EdTech” marketplace
41. Threat of open education resources (OER)
Institutions actively supporting
OpenStax
OER commons
Textbook pricing viewed as exploitive
Publishers reluctant to publish in OER
categories
OER content growing in reputation
State/local government legislation combating
high textbook pricing
California digital open source library
42. Faculty perceptions of open education resources
0
10
20
30
40
50
60
70
80
Using OER Consider Viable
alternative
No experience with
OER
Expect to use by 2020 OER never primary
text
Source: Open Resource Content
43. Taylor and Francis product development strategy
Source: Taylor & Francis
44. Taylor & Francis digital transformation
Source: Taylor & Francis
45. Wiley’s approach to the education value chain
Source: Wiley investor conference
50. College retail market segmentation (est).
Amazon
35%
B&N/Follett
34%
Independents
31%
Source: Research
51. Nielsen Book Pubtrack sales analysis tools
Only consolidated source for data about U.S.
College Course material “sell through” and
“adoption”.
• Used by nearly 100 clients
• Contractual arrangements with primary retailers
excluding Amazon
Source: Nielsen PubTrack
52. Pubtrack overview
Nationally representative sample of trends
through campus bookstores
Primarily supplied by college bookstores (in-
store + online)
Tied to a school (via Carnegie
Classifications/FICE codes)
Online retailers not included (can’t be tied to
schools)
Data on other alternate sources (e.g., student
swaps, etc) not included
Source: Nielsen PubTrack
53. Pubtrack data sources
Course material POS (check out) raw data
Tracks new & used POS data
4 and 2 year colleges, select for-profit institutions
Over 3,600 bookstores & online retailers tied to 2,500
schools
Course adoption (enrollment) & course details
Course book in use and instructor data from registrars
Sample represents 65% (FTE) of higher ed. market
Pre-order and wholesale data from 4,200 outlets
Data normalizing
Sophisticated modelling to accommodate missing
channel volume
Source: Nielsen PubTrack
54. Data sources:
Retailers:
Follett, Barnes & Noble, Nebraska, 1,500
independents
B&N college, MBS Direct, eCampus.com
For profit schools
Apollo group, Laureat, Corinthian, + others
College information
Course codes
Carnegie codes
Bibliographic data
Publisher metadata files, ONIX
Source: Nielsen PubTrack
56. The top disciplines stay constant too
12% 12%
13%
9%
9% 9%
7% 7% 7%
6% 6% 6%
4% 4% 4%
0%
2%
4%
6%
8%
10%
12%
14%
2011 2012 2013
Market Share of Top HE Disciplines (Est. Value)
Mathematics English Biological Sciences Psychology Computers & Information Systems
Source: Nielsen PubTrack
57. How students purchase textbooks
0%
10%
20%
30%
40%
50%
60%
2010 2011 2012 2013
In Store Purchase Online Device Other
Source: Nielsen PubTrack
58. Top selling course materials
Discipline: Course USD (mil)
Psychology: Introductory
$285,043
Foreign Languages and Literature: Spanish: Language:
Elementary $234,377
Biological Sciences: Anatomy and Physiology: Introductory: Two
Term $208,648
Computers & Information Systems: Applications: Office Suites
$196,961
Chemistry: Introductory: General: General
$174,726
Mathematics: Software
$161,238
Biological Sciences: Introductory: Non-Majors
$159,473
English: Composition: Introductory: Rhetoric
$151,556
English: Composition: Introductory: Handbooks: Complete
$141,958
Interdisciplinary Studies: Orientation to College
$132,086
Source: Nielsen PubTrack
59. New text price increasing the gap above used price
$64.31
$69.95
$73.85
$77.25
$82.17
$85.73
$50.74
$56.98 $58.89 $60.47 $60.69
$62.94
$-
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
AY 08 AY 09 AY 10 AY 11 AY 12 AY 13
avg new price
avg used price
Source: Nielsen PubTrack
65. The bulk of this material was created as
part of an ‘envisioning’ session with a
client to foster a further discussion about
business strategy.
Michael Cairns
Managing Partner
Michael.Cairns@InfoMediaPartners.com
908 938 4889
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