The State of Sourcing

As a market to sell in or as a destination to outsource to, businesses across the world have been fascinated by China. The Chinese economy has relied heavily on exports – mostly contract manufacturing. Contract manufacturing here is a loosely used term. It encompasses everything from shoes, clothes, books, computer peripherals to machinery, heavy fabrication, automobile parts etc. It would be safe to assume, that every product out in the market has a Chinese contribution. Services might take longer to make a significant contribution to the economy, but once the population overcomes language issues, revenues from services are likely to increase.

This week, I came across an article that mentioned a few numbers about the publishing industry – which I think is indicative at best. While the numbers might be debated upon (and that would be welcome), it does not discount the fact that China is a strong contender – as a destination to outsource printing and as a potential market to sell in.

Continue reading ‘The Paper Dragon’ »

The iPad is still making the news – a search on Google News for the keyword ‘iPad’ returned close to 19,000 articles for the last month alone. The iPad, since its launch 80 days ago, has already sold three million units and shows no sign of slowing down. Like it’s other products, Apple has managed to create a strong market buzz for the iPad.

Recently, I had the chance to get my hands on an iPad – and I was impressed. The few minutes I had with the device left me appreciating the effort Apple has put into the device. The interface, driven by a touch screen, is remarkably easy to use and it makes it all the easier to access the web or play games. But what really caught my eye was the e-book experience. The book (if I remember correctly, the free copy of Winnie the Pooh), looked great – so great that I can imagine myself using it for all my reading. I can’t help but wonder if more like me are considering the switch?

Continue reading ‘Apple iPad: Loved it!’ »

From releasing a new Kindle application for Android devices to allowing customers to exchange textbooks for a gift card or announcing Facebook and Twitter support in Kindles – the past few days have been quite eventful for Amazon.com, Inc. (NASDAQ: AMZN). While these new developments reflect the inherent dynamism in the book distribution market, the possible launch of Google Editions or DangDang.com planning an IPO are indicative of the competition that the market is witnessing.

But of all the news items, what I found most interesting has been the announcement of AmazonCrossing. AmazonCrossing will use customer feedback and data from other Amazon sites to identify non-English best sellers. Once identified, Amazon will acquire and translate the book for consumption by the global English-speaking audience. The move leverages Amazon’s existing distribution networks that contain multiple channels, formats, stores and partnerships with independent book sellers.

Continue reading ‘Amazon translating into more business’ »

For an industry that has been questioning the way it has been functioning for the past decade, the publishing industry seems to be rejuvenated with the potential of the digital market. While publishers look to overcome the decline of print by developing digital market as a revenue source, it becomes even more important to have the right vision while addressing it.  Venturing into potentially unchartered waters, require the publishers to adopt a steep learning curve that means not only operating like a Net company but also creating a strong value proposition.

A significant section of publishers addressing the digital market have relied on partners. Right from producing books, adapting them to various devices or distributing them to readers, publishers have seen the merits of depending on partners. Take for example the Apple iPad. Publishers look at this piece of gadgetry with the same glee that the music industry did when the iPod was released. Some have gone to the extent of proclaiming the iPad as the backlit beacon of hope for the publishing industry. I do not think so!

Continue reading ‘Will the iPad help the publishing industry?’ »

For paper manufactures like Norske Skog, AbitibiBowater and Stora Enso the past few months have been critical. The newspaper industry, one of their largest market, has been witnessing significant upheavals in operations. Newspaper publishers are in the midst of many challenges, and the rise in cost of print is just going to trouble them more. According to RISI (a consultancy firm for paper and pulp products), global rates has increased by 25%.  This has led to many publishers in growing markets shelving launch/expansions and those in developed markets feeling an additional pinch.

While cost pressures have always existed, revenue pressures hit newspaper publishers hard – an aftermath of the economic collapse.  Publishers lost advertisers, consumers were cutting back on expenses and moving online to gain access to news – prompting many to migrate to and address the digital market. As the prices of raw materials increase at the paper manufacturer’s end and consequently at the publisher’s, the ability to align rising costs with prices of newspapers will get tougher. Affording news in print will be a luxury, and this in turn will prompt a significant portion of newspaper readers to move online.

Continue reading ‘How will paper manufacturers cope?’ »

The e-book market is still hazy at best, and the influx of e-book readers is not helping publishers and readers.  To get a better sense of how many e-book readers are out there, I did a Google News search. There are close to 1500 articles from the start of this year – an indicator of the flurry of activity that the device space has seen. (In all fairness, a significant proportion of them might be from Apple and the iPad). I am  amazed at how many e-book readers are already out there or are due for launch. Many gadget companies have already started looking at this space and are accordingly launching their products. I have listed a few of the e-book readers that I have come across. (Do let me know if I missed any)

Amazon Kindle, Sony Reader, Barnes and N0ble Nook, Apple iPad, Plastic Logic, InfiMedia Pi, Asus, Lenovo, Acer, Samsung, Neonode, BeBook, Spring Design Alex, Aluratek Libre, Yinlips, Teclast K3, Oppo Enjoy, Hanlin, Cube, iRiver, Interead Cool-er, Elonex, Bookeen Cybook Opus, Onyx BOOX, QuokkaPad, Hanvon, IREX, Copia

Continue reading ‘Reading into the device market…’ »

The newspaper and magazine segments are the largest contributors in revenues to the global publishing industry – contributing close to 52% of global publishing revenues. It would therefore be safe to assume that of all the challenges faced by the industry, none would be as altering (in terms of revenues) as the challenges faced by these two segments. The newspaper and magazine segments have already lost considerable revenues on account of dip in ad revenues. This is directly attributable to the global economic slowdown, which has led to decrease in consumer and corporate spending.

Continue reading ‘Magazines: Ad-ing up the losses’ »

With the publishing industry facing cost pressures, change in consumption patterns and struggling to sustain its revenues, it only seemed logical that the industry as a whole would outsource more. To truly understand how the industry value chain perceived outsourcing, we at ValueNotes Sourcing Practice decided to conduct a publishing survey.

To gain clarity on where the industry is heading, we needed to understand: Continue reading ‘Publishing Survey: Disparity in cost savings continues’ »

The newspaper and magazine segments are the largest contributors in revenues to the global publishing industry – contributing close to 52% of global publishing revenues. It would therefore be safe to assume that of all the challenges faced by the industry, none would be as altering (in terms of revenues) as the challenges faced by these two segments. The newspaper and magazine segments have already lost considerable revenues on account of dip in ad revenues. This is directly attributable to the global economic slowdown, which has led to decrease in consumer and corporate spending.

Does a drop in revenues merit a need to re-invent the business model? How are publishers coping with the dip in revenues? Will the digital market provide a strong revenue source? Will this mean more outsourcing/offshoring?  Over two posts, I will answer these questions, starting with the newspaper segment.

Continue reading ‘Newspapers: Stop the presses?’ »

In one of my previous posts, I had written about the rise of Google in the ebook market and its implications. But are ebooks as important an offering as the publishing industry is making out to be? Will ebooks be a one fit solution for publishers? Can a publisher ultimately sustain on revenues from ebooks?

So will ebooks address the  challenges faced by the industry today?
Continue reading ‘Can ebooks sustain publishers?’ »