acquisitions, corporate restructuring and the future. nfais workshop 2012
TRANSCRIPT
Michael Cairns
Managing Partner
Information Media Partners
Acquisitions, Corporate
Restructuring and the Future?
Annual Predictions for Publishing 2012
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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
Find me:
LinkedIn Twitter Blog Flickr InstaGram
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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
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Change
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Change
leads to
Opportunity
Image: http://www.success.co.il/knowledge/images/History-Historiographies-Glass-of-water.jpg
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What
Business
is this6
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$25 Billion?
$35Billion?
$150Billion?
$500Billion?
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What business is Pearson in?
Pearson PLC Annual Report: Competitors
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Content “platforms” are the future
Extensible
Proprietary content
Applications
Source data
User data
Third party & free content
etc, etc, etc.
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1010
Activity in
2012
indicates
there are
more and
bigger
changes
upcoming
not fewer.Photo: Universal Pictures
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Where to look?
Slowing growth rate of ebook sales
eReader devices losing out to tablets?
Students dislike eReaders for textbooks
The big trade book merger
The bigger textbook divestiture
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2013 comes bearing gifts….
More combinations in trade
Cengage & McGraw Hill?
Pearson: Already in year six
Will business model begin to collapse?
An education technology bubble?
Challenges from out of nowhere
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2013
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Change is Coming
Trade
Re-evaluation
of value chain
Direct-to-
consumer
models
Publishers as
retailers,
retailers as
publishers
Professional
Software as a
service
Application
providers
Service
outsourcers
Embedded
content
Education
Expanded
value chain
Solutions
providers
Custom
production
Content,
assessment,
remediation,
management
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2,600+ Transactions in past 6mths
Education: 107 deals 22 deals in K12 technology
Finance: 161 deals 47 deals in payment technology
Entertainment: 313 deals 51 deals in Internet-related services and content
Healthcare: 121 deals 63 in health IT
Media & Marketing: 612 deals 151 deals in Internet media content and platforms
Online: 798 deals 234 deals in SAAS/ASP models
Software: 568 deals 309 in niche software
14Source Manadasoft
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Corporate Development 101
Cost & expense
Economies of scale
New market(s)
Expertise
Technology/secrets
Eliminate competition
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Why Random Penguin?
All about scale
Reducing factor costs
Consolidating operations
Competing for bigger authors
Is it cynical?
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Hello, I’m
Random
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Innovation is still on the fringe
Book publishers have absorbed the implications
of digital publishing
Linking the parts together
Haven’t addressed long term scenarios
Big change remains and will come rapidly
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Trade: “a giant mess and no massive change”
Top of the pyramid
Senior executives are focused on ‘E’
Most publishers not addressing the transition
Reliant on supply chain to drive e-Content
Curation isn’t well understood but will be critical
Workflows are being redefined
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McGraw-Hill divesture
Differing corporate
priorities
Shareholder expectations
Not the end of the “holding
company”
Access to capital
Content not enough for
competitive advantage
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Education: “faster than anticipated”
E-Content migration significantly underway
Successes with “born digital” content, not just ‘migrated’ print content Few publishers thinking about ‘e’ from scratch
eBook hardware have failed (thus far) in education
Market develops to a ‘database’ and ‘subscription’ model Content becomes ‘dynamic’
Platform for services and content
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What do you mean there’s a test?
Assessment
Strong impetus in K-12
Becoming important in college & post grad
Adaptive learning
Tailored to individual capability
Self-regulated/directed
Empowers learner
Bigger in post-college market?
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Google buys ITA software
Content: Flight/travel search
Utility
Technology
Niche
$700million acquisition
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Driving M/A activity
Innovation
New models
Talent
Technology
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To name a few…
Apollo buys MGH: Content
Providence buys Blackboard: Access
Follett purchases Betterknown: Access
Echo360 buys Thinkbuilder: Social Learning
Elsevier purchases Mandeley: Community
Pearson acquires Embanet: Delivery
Wiley buys Deltak: Platform
Pearson acquires Learning Catalytics: Talent
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What’s
the
platform
Kenneth25
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A successful platform
Branded content vertical
Workflow solutions and technologies
Common taxonomy and ontology
Consistent revenue model
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Platforms network transactions
Normalize a set of behaviors
Facilitate communication
Transact information, goods & services
Network effect drives usage & utility
Provider costs decline
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“So our excitement about the new
platform is that, one, we are able to bring
tremendous feature
functionality to the user, whether it is the researcher
or the end user and, two, we are able to give them
capability that everyone is after”- LexisNexis
Quote: Information Today
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Trailblazers help
At an SIIA education conference in 2012,
Scholastic Education President Margery Mayer
noted that data dashboards for their educational
technology products were derived from Mint.com,
WeightWatchers.com, and NikeRunning.com.
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Would you like
to play in a
market 4x as
large?
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The LexisNexis Model
Global Application of Platform and Content
Secondary Legal Content
Primary Legal Content
News & Business Content
Public Records
Company & People Information
PracticeManagement
Litigation CorporateCounsel
Risk Management
ResearchClientDevelopment
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An Education Model
Global Content Application & Distribution Platform
Pre K Grade Content
K – 12 Content
College Content
Supplemental & Advanced Degree
Vocational & College Prep
Assessment InterventionRemediation
CourseManagement
School Administration
Teacher/Faculty Support
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Another look at Pearson
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The Innovators
Many new entrants
PE investment accelerates
Eventually ‘run out of market’ with consolidation –
but years off
Opportunities: workflow, training, content
management, productivity, etc.
Innovators are addressing and solving problems
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Competition from customers
Massive Open Online Courses
Direct to student model
Unlimited class size
Branded faculty abandoning tenure
Coursera, Edx, Udacity
Delivery unsettled – textbook still reigns
Custom
Self-publishing
Ebooks
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It is all about ‘access’ (not content)
First-year class size is stagnant
Applications have exploded
150,000 students signed up
Top ten ‘graduates’ were ‘non-students’
There’s a whole new world out there
Brand protection and extension
Model not perfect but not intractable
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Your New Customer Experience
Utility
Integration of content and applications
Broad productivity and workflow benefits
Internal and external process integration
Stats
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What happens next?
More bubbles
Expand offerings or be pushed out
Competition from left field and a byproduct
Customers as content producers
Platform providers as customers
Attribution of consumer models
The platform as an operating system
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Please review my blog post associated
with this presentation:
https://personanondata.blogspot.com/201
3/04/nfais-workshop-presentation-
predictions.html
Michael Cairns
Managing Partner
908 938 4889
LinkedIn Twitter Blog Flickr InstaGram