Jodi Picoult Changes Publishers

September 5, 2012, 8:00 pm

By JULIE BOSMAN

The best-selling author Jodi Picoult has jumped to Ballantine Bantam Dell from Atria for her next book deal, a three-book acquisition that Ballantine announced on Wednesday. The first novel is scheduled for release in 2014.

Ms. Picoult, the author of 19 novels including “Sing You Home” and “House Rules,” said in a statement, “I am incredibly excited to start a new chapter in my publishing career by joining the Ballantine/Random House team; I'm energized by their enthusiasm and their plan for my future.”

Gina Centrello, the president and publisher of the Random House Publishing Group, and Libby McGuire, the publisher of Ballantine Bantam Dell, negotiated the acquisition. There are more th an 22 million copies of Ms. Picoult's novels in print.

Spotify Is Said to Profit From Its Subscribers, but Lose More Luring Them

September 5, 2012, 5:55 pm

By BEN SISARIO

Media Decoder recently looked at the books of Spotify and Pandora, two of the most popular digital music services, and noted that both companies - despite having very different business models - wind up paying most of their revenue in music royalties.

Many readers had strong reactions to the article. Some pointed to the “greed” of the music industry. Others defended record companies' (and artists') right to charge what the market will bear for their music; after all, it isn't the responsibility of the royalty owners to figure out a way to make a profit streaming music, they argue, that's a riddle for Pandora and Spotify to solve.

On Wednesday, Enders Analysis, a British research firm that special izes in media companies, published a report that looked more closely at Spotify's potential path to profit. On the one hand, the Enders report noted, Spotify generates a healthy return selling monthly subscriptions. On the other, it loses large amounts of money using free music as a marketing tool to attract those paying subscribers.

The challenge for Spotify is how to build its subscriber rolls without giving away too much of what the report calls “expensive free music.”

Spotify's two-tiered model is the core of its strategy, and the reason it has grown so quickly. For a decade now, there have been streaming-music plans that allow a listener to choose exactly what song or album to play, but they have always come at a cost; Spotify's insight was to make its service easier and more convenient than piracy, which meant there had to be a free option.

Spotify's bet is that enough users will want to subscribe - to eliminate the ads and get other perks - that they will eventually start paying about $5 to $15 a month, depending on the country. Four million people in 15 countries subscribe to Spotify, and a total of at least 15 million people use the service each month. (The majority of them, of course, do not pay a dime.)

Enders's report tries to separate the free and paid parts of Spotify's accounts. Using a combination of company data and its own estimates, Enders says that subscriptions gave Spotify a gross profit of about $76 million, while the company lost roughly the same amount on its ad-supported tier. “Spotify is now finding the legitimate free services can lure fans away from piracy, but at the expense of investor capital,” wrote the authors, Alice Enders and Ben Rumley.

According to Spotify's public accounts for 2011, it had about $236 million in revenue, 83 percent of which was from subscriptions, and the company paid $229 million in “costs of sales,” including royaltie s, distribution costs and other unspecified expenses. After salaries and other costs, its net loss for the year was $57 million.

Like Spotify, Pandora is also in growth mode, and is shouldering losses to attract more listeners. It already has more than 150 million registered users, and while the company reported a $5.4 million loss on $101.3 million in revenue in its second-quarter earnings last week, its stock rose soon after - in part because the company is starting to figure out how to make more money on mobile advertising, a weak spot in the past. (Like Spotify, Pandora has both free and paid tiers, but promotes the free service much more heavily and sees itself as a competitor to terrestrial radio.)

For Pandora, the key to survival is simply to sell more advertising. But for Spotify it will be figuring out how to manage the marketing expense of free music. Enders recommends that Spotify put limits on free listening for American users; in most of Spotify's ot her markets, listening caps - for example, no more than 10 hours a month - kick in after an initial grace period.

But how long is that period? When it came to the United States  last summer, Spotify said its limits would be waived for six months. More than a year later, however, there still are no caps. The Enders report says these “are not slated to be introduced in the U.S. until July 2013″; it did not cite a source for this detail, although in an e-mail, Ms. Enders attributed it to her interviews with company executives. On Wednesday a Spotify spokesman said there were no such plans for the United States.

Listening limits are probably inevitable, but they come with risk. While some users will react to caps by signing up, plenty will simply go elsewhere for their free music, perhaps to other legitimate services or perhaps to pirate ones - which is the last thing that either Spotify or the music industry wants.

Ben Sisario writes about the music industry. Follow @sisario on Twitter.

Bank of America Adopts Simpler Checking Account Disclosure

September 5, 2012, 3:20 pm

By ANN CARRNS

Bank of America recently became the last of the three biggest United States banks to adopt simplified checking account disclosures, as advocated by an arm of the Pew Charitable Trusts.

Chase and Citibank have already adopted such disclosures, as have roughly a dozen smaller banks and credit unions. Pew's Safe Checking in the Electronic Age project originally proposed a one-page format, but most banks have had to use at least two pages.

With the addition of Bank of America, five of the 12 largest banks have adopted the simplified format, Susan Weinstock, director of the checking project, said in a statement. “We urge other financial institutions to follow suit,” she said.

The format uses plai n language and makes it easier for consumers to see what sort of fees an account charges and to compare various banks' offerings. Most banks still use lengthy disclosures filled with legal jargon that is difficult for customers to decipher. A Pew report found that disclosure documents among the nation's 12 largest banks had a median length of 69 pages.

Does your bank use a simplified disclosure?

Newspaper Publisher Journal Register Files for Bankruptcy and Plans for a Sale

September 5, 2012, 1:20 pm

By THE ASSOCIATED PRESS

The Journal Register Company, whose newspapers include The New Haven Register and The Trentonian, has again filed for bankruptcy protection and hopes for a quick sale, said Digital First Media, which operates the company along with the MediaNews Group.

The Chapter 11 filing announced Wednesday comes three years after Journal Register emerged from a prior bankruptcy case.

EarlierNewspaper's Digital Apostle

In this profile from last year, John Paton, the chief executive of Digital First Media, whic h operates the Journal Register Company, argued that newspapers had to move quickly to digital from print.

Digital First Media says it expects normal operations to continue during the sales process. Journal Register would be sold at auction, it said, and had signed a stalking horse bid from an affiliate of Alden Global Capital.

The chief executive of Digital First, John Paton, said Journal Register had more than doubled its digital audience in the last two years. But he said the company was still struggling with print advertising and legacy costs.

Journal Register operates news and media operations in 10 states.

In making the announcement, the company sent an e-mail to the staff, which follows below:

E-Mail to the Staff

Today Digital First Media announced Journal Register Company has filed
for Chapter 11 bankruptcy and will seek to implement a prompt sale.

We expect the auction and sale process to take about 90 days, and I am
pleased to tell you the company has a signed stalking horse bid for
Journal Register Company from 21st CMH Acquisition Company, an affiliate
of funds managed by Alden Global Capital L.L.C.

So why file Chapter 11?

The company exited the 2009 restructuring with approximately $225
million in debt and with a legacy cost structure, which includes
leases, defined benefit pensions and other liabilities that are now
unsustainable and threaten the company's efforts for a successful
digital transformation.

From 2009 through 2011, digital revenue grew 235 percent and digital audience
more than doubled at Journal Register Company. So far this year,
digital revenue is up 32.5 percent. Expenses by year's end will be down more
than 9.7 percent compared to 2009.

At the same time, as total expenses were down overall, the Company has
invested heavily in digital with digital expenses up 151 percent since 2009.
Journal Register Company has and will continue to invest in the
future.

But also from 2009 to 2011 Journal Register Company's print
advertising revenue declined 19 percent and print advertising represents more
than half of the company's revenues. Print advertising for the
newspaper industry declined approximately 17 percent over the same time
period, according to the Newspaper Association of America. As well,
both print circulation and circulation revenue have also declined over
the same time period.

Since 2009, printing facilities have been reduced from 14 to 6; 9 of
the 50 owned facilities have been sold and 8 distribution centers have
been outsourced.

During the same time period, debt was reduced by 28 percent with the company
currently servicing in excess of $160 million of debt.

All of the digital initiatives and expense efforts are consistent with
the company 's Digital First strategy and while the Journal Register
Company cannot afford to halt its investments in its digital future it
can now no longer afford the legacy obligations incurred in the past.

Many of those obligations, such as leases, were entered into in the
past when revenues, at their peak, were nearly twice as big as they
are today and are no longer sustainable. Revenues in 2005 were about
two times bigger than projected 2012 revenues. Defined Benefit Pension
underfunding liabilities have grown 52 percent since 2009.

After a lot of thought, the board of directors concluded a Chapter 11
filing was the best course of action.

Journal Register Company's filing will have no impact on the
day-to-day operation of Journal Register Company, Digital First Media
or MediaNews Group during the sale process. They will continue to
operate their business and roll out new initiatives.

If you have questions ju st ask ­ you know how to reach me.

I know this announcement will leave you with questions ­ ask. Your
managers, I and any member of senior leadership at Digital First Media
will be available to answer.

And while I get this news may make some of you nervous, don't let it.
Concentrate on the job at hand and we will work through this. This
really is the right decision for Journal Register Company.

Barbara Marcus to Lead Random House Children\'s Books

September 5, 2012, 12:30 pm

By JULIE BOSMAN

Barbara Marcus, the children's publishing veteran who acquired the seven Harry Potter books when she was an executive at Scholastic, has been chosen to lead Random House Children's Books, the company announced on Wednesday.

Ms. Marcus will succeed Chip Gibson, the president and publisher of the division, who has been with Random House for more than 30 years.

In a memo to the staff sent on Wednesday, Markus Dohle, the chairman and chief executive of Random House, called Mr. Gibson “universally loved and respected.”

“Chip feels he has accomplished almost everything he originally set out to do professionally,” Mr. Dohle wrote. “Now, he wants to take an extended break from work.”

< p>Ms. Marcus will take over immediately. She has recently been an adviser to Open Road Integrated Media and Penguin Group USA.

Mr. Dohle approached her for the job, Ms. Marcus said in an interview, and she accepted because the timing made sense, she said.

“It had been seven years since I had left Scholastic, and it seemed the right time for me to rejoin a children's division,” she said. “It's just an interesting time in the publishing business and especially in the children's business with both print and digital working in very interesting ways.”

A Tool for Those Who Fall Behind on Student Debt

September 5, 2012, 11:06 am

By ANN CARRNS

Have you fallen behind on your student loan payments? The Consumer Financial Protection Bureau this summer introduced an online tool to help you evaluate your options.

The “Student Loan Debt Collection Assistant” asks a series of questions to help you determine what steps to take if you've missed payments or think you may in the future. It starts by asking if you have federal loans - like a Perkins or Stafford loan - or private loans. (If you aren't sure, the site has a link to the National Student Loan Data System, where you can find the answer). Federal loans generally have more protections for borrowers who fall behind on payments.

If you've missed payments already, the tool advises you to con tact your loan servicer - the company that collects and keeps track of your payments - to see what can be done to avoid going into default.

If you have federal loans, for instance, you should ask your servicer about alternative payment arrangements, like income-based repayment plans, which may significantly lower your monthly payment.

Fewer protections are available on private loans. In some cases, you can be considered in default if you miss just two payments.

The site says that even if you are in default on a private loan, you have rights. For example, debt collectors attempting to obtain payment of a private student loan cannot garnish your wages without a court order, or seize your federal or state tax refund.

Take a look at the tool and let us know what you think. Have you fallen behind on your student loans? What steps did you take?

The Breakfast Meeting: A Fall Book Bonanza and the New Cosmo Girl

September 5, 2012, 9:45 am

By BRUCE HEADLAM

The book industry is looking forward to some good news for a change. This fall, the big publishers are unleashing a murderer's row of authors â€" including Salman Rushdie, Zadie Smith and Junot Diaz â€" in what it hopes will be a huge season. The two biggest swings: Tom Wolfe writing his first novel in eight years and a work of adult fiction by JK Rowling, the creator of Harry Potter.

To bolster its growing streaming service, Amazon signed a deal with the cable channel Epix yesterday, gaining access to the company's collection of movies like “Iron Man 2” and “The Hunger Games.” Epix currently has a deal with Netflix that is set to expire next year although Netflix could still negotiate for future , non-exclusive rights.

A Brit taking over a venerable American magazine is hardly news but Joanna Coles taking over Cosmopolitan is. Ms. Coles, a former newspaper reporter, ran Marie Claire, which like Cosmo is owned by Hearst, and took that second-tier fashion book upscale and made it a success. Now she'll take on Cosmo, which has bucked industry trends by increasing its circulation in the past few years and has built a formidable line-up of international editions.

The $2.6 billion acquisition of AMC Entertainment might just be the start for the Chinese company Dalian Wanda Group. Wang Jianlin, the chairman, said his company has $10 billion it wants to spend in the United States in several industries, including potentially film production.

Maybe there really isn't any such thing as bad press. Prime Minister David Cameron shook up his cabinet yesterday, yielding one major surprise: a promotion for Jeremy Hunt, the former minister for culture, media and sp ort who has been grilled over his ties to Rupert Murdoch's News Corporation as the company bid for the rest of BskyB. Mr. Hunt now takes on the massive job of health minister.

Wednesday Reading: When Restaurant Prices Vary by Reservation Time

September 5, 2012, 8:51 am

By ANN CARRNS

A variety of consumer-focused articles appears daily in The New York Times and on our blogs. Each weekday morning, we gather them together here so you can quickly scan the news that could hit you in your wallet.

Bud Light Steps Up Its N.F.L. Sponsorship Efforts

September 5, 2012, 7:00 am

By STUART ELLIOTT

Add Anheuser-Busch to the long list of sponsors of the National Football League that are opening their campaigns to help promote the start of the league's 2012-13 season.

Anheuser-Busch, part of Anheuser-Busch InBev, is introducing on Wednesday a campaign for its Bud Light brand, the official beer sponsor of the N.F.L. The campaign declares this to be the “Year of the Fan.”

The campaign is extensive, including a fantasy football promotion using codes on more than two billion bottles of beer; television commercials from Translation in New York, the new lead creative agency for the Bud Light brand; and covering the paper cartons for 12-packs of 12-ounce cans of Bud Light with a material that to some degree feels like a football.

Ads are also coming out for other major sponsors of the season, which begins on Wednesday. They include GMC trucks, New Era caps, Tide detergent, Pepsi-Cola, Frito-Lay snacks, Gatorade, Tropicana and Quaker Oats.

This will be the second season that Bud Light, the nation's best-selling beer brand, will be the official beer sponsor of the N.F.L. “We had a very successful Year 1,” said Mike Sundet, vice president for Bud Light at Anheuser-Busch in St. Louis, as evidenced by “a lot of brand health improvement.”

“Year 2 is all about making that even bigger and even better,” Mr. Sundet said, by “making sure we focus on the fans.”

“It's not about being a corporate sponsor,” he added. “It's about making the game more enjoyable for N.F.L. fans and Bud Light drinkers.”

The fantasy football aspect of the campaign is already under way, under the name Bud Light Fant asy Football League. A section of the Bud Light Web site, budlight.com, is devoted to the promotion, as is a commercial by Translation.

“Welcome to Bud Light fantasy football,” an announcer says, “where every bottle is a player.” Actors playing fans then describe how they are faring in the league, based on the codes on the beer bottle caps that they enter on budlight.com/ffl.

“My Bud Light threw four touchdowns,” one happy fan says.

But not all bottles are winners, alas, as depicted by a morose fan who says, “My Bud Light fumbled at the three-yard line.”

Another new commercial by Translation is about fans rather than the Bud Light fantasy promotion. The spot, which features the Stevie Wonder song “Superstition,” shows the oddball and offbeat rituals that superstitious fans observe, like crossing their fingers, wearing different-colored socks, going barefoot and touching a banner as they enter a room.

As the commercial conclu des, these words appear on screen: “It's only weird if it doesn't work.” Then an announcer says: “Bud Light, the official beer of fans who do whatever it takes. Here we go.” (“Here we go” is the Bud Light brand ad theme.)

The spot about superstitions may remind some viewers of a commercial that Coca-Cola ran during Super Bowl XLVI in February, which promoted the Coke Polar Bowl featuring the animated Coca-Cola polar bears.

The Coke commercial, called “Superstition,” showed a polar bear crossing its fingers and toes, among other rituals, as it watched the game.

The two Bud Light commercials will run during the game on Wednesday that kicks off the 2012-13 season, between the New York Giants and Dallas Cowboys.

Bud Light will run spots on all the networks and channels that will present games during the season, Mr. Sundet said, including ESPN, CBS, Fox and NFL Network.

Other elements of the campaign include a Tickets for Life Sweepst akes, a promotion to encourage recycling and ads aimed at Hispanic consumers.

Translation had already been working on the Bud Light commercials, Mr. Sundet said, when it was named the lead creative agency for the brand last month. Translation, which also creates campaigns for brands like Bud Light Lime and Bud Light Platinum, took over the creative duties for Bud Light from McGarryBowen, part of the Dentsu Network unit of Dentsu.

Stuart Elliott has been the advertising columnist at The New York Times since 1991. Follow @stuartenyt on Twitter and sign up for In Advertising, his weekly e-mail newsletter by clicking here.