Sales of ebooks outstrip hardbacks on US Amazon for the first time

Today the Guardian published an article from the head of Penguin books, John Makinson – a man with an interesting career path, more varied than most in the publishing world – showing that the growth of ebooks seems to be following the same path as, say, digital music or digital movies. Me, I still got my vinyl, still got my books. As I said my colleague Andrew earlier today with books I like the navigation….

John Makinson says that if people want to read using new technology, that’s what publishers must give them

Penguin this week celebrates its 75th year and is marking the anniversary by repackaging a series of seminal books from the 1960s to the 1980s. Although the company might afford itself a brief look backwards, it feels as though there is little room for nostalgia in book publishing now, as the industry turns its face firmly – and apprehensively – to the future.

Amazon last week announced sales of ebooks on its US site had outnumbered hardbacks for the first time, stunning casual observers, even if it had not been entirely unexpected in the trade.

The launch of the iPad has added a sense of urgency. Where music went first, books are set to follow, although Penguin and other publishers would hope without the same devastating effects. Amazon this week launched a cheaper, more lightweight version of its Kindle ebook reader and a digital store on its UK site, while others, including Google, are muscling in. Digital book sales are still less than 1% of Penguin, but the direction of the market is clear. In the US, digital books already account for 6% of consumer sales.

Penguin chief executive John Makinson says he is a convert. The day after we meet he is on his way to India, as part of David Cameron’s delegation, and had loaded titles on to his iPad, including a manuscript by John le Carré and some Portuguese classics (in English) ahead of Penguin launching a range in Brazil. He is also reading Lord Mandelson’s diary. It simply makes sense, he says, instead of carting an armful of books in your carry-on luggage.


“It does redefine what we do as publishers and I feel, compared with most of my counterparts, more optimistic about what this means for us,” he says. “Of course there are issues around copyright protection and there are worries around pricing and around piracy, royalty rates and so on, but there is also this huge opportunity to do more as publishers.”
Publishing, he says, must embrace innovation: “I am keen on the idea that every book that we put on to an iPad has an author interview, a video interview, at the beginning. I have no idea whether this is a good idea or not. There has to be a culture of experimentation, which doesn’t come naturally to book publishers. We publish a lot of historians, for example. They love the idea of using documentary footage to illustrate whatever it is they’re writing about.”

The very definition of a book is up for grabs he says, although the company has just published a version of Ken Follett’s The Pillars of the Earth for the iPad in the US that might provide clues – and horrify traditionalists. It includes scenes from a TV adaptation embedded in the text, as well as extras including the show’s music soundtrack and Follett’s video diary during the making of the series.

For now, Makinson says, digital books are expanding the market; hardback sales in the US are up this year, despite the march of ebooks. Piracy is not yet a significant issue and lessons have been learned from the music business.

“You have to give the consumer what the consumer wants – you can’t tell the consumer to go away. So we didn’t participate in this experiment where a number of publishers deferred publication of the ebook until a certain number of months after the hardcover publication. I thought that was a very bad idea. If the consumer wants to buy a book in an electronic format now, you should let the consumer have it.”

He has added confidence, because with tablets such as the iPad, consumers are used to paying a subscription to the wireless operator and for “apps”, creating a more benign environment than the wild west of the PC, where users are used to getting everything for free.

Penguin’s profits more than doubled to £44m in the first half of the year. The company gained market share, but one reason for the dramatic improvement was the outsourcing of some design and production to India last year; the company now has around 100 designers in Delhi making books for Dorling Kindersley, belying the idea that Britain can at least live off its creative industries. Makinson defends the decision and says DK is now back in profit, which means it can reinvest in Britain: “We can’t pretend we can do everything here. In order to be internationally competitive, some work needs to be done in other places.”

About 8% of the publisher’s sales are from its classics, including Jane Austen and Charles Dickens, and revenues are still growing, despite much of the copyright being in the public domain. It is launching the range in Mandarin, Korean and Portuguese. But it is not all highbrow. What would Penguin’s founder, Sir Allen Lane, whose aim was to publish quality paperbacks for the masses, have made of Penguin putting out books “by” Peter Andre or Ant & Dec?

“Allen Lane’s view was that we should publish good writing of all kinds for all audiences at affordable prices,” Makinson says. “I’m not saying he would necessarily have approved every single publishing decision we take, but would he have approved of Penguin being a very democratic publishing company, publishing for lots of different tastes? I think he would definitely have approved.”

Makinson has long been mentioned as a successor to Dame Marjorie Scardino, who runs Pearson, Penguin’s parent company. Her departure has been a perennial question, though she has defied the investment community’s chattering classes by staying in her post for well over a decade. She has also confounded expectations by keeping Penguin and the Financial Times in a group dominated by educational publishing. Makinson says it now makes more sense than ever for Penguin to remain part of the group, as the digital era draws each division closer.

He says there will still be the need for publishers in the digital world: “I used to have this discussion with [Hitchhiker’s Guide to the Galaxy author] Douglas Adams. He created this thing called the digital village, an online publishing platform. Douglas’s argument was, ‘all of my friends will come along and publish on digital village and you the publishers will be disintermediated, you will be irrelevant’. Well, it hasn’t happened. I am not aware of any successful direct to consumer publishing model that exists.

“The reason it doesn’t work is that the publishers do actually perform quite a useful service: they edit the book, then they publicise it.” In the physical world, they make sure it is stocked in bookshops, he adds.


Makinson, 55, perhaps feels more adaptable than some of his counterparts because he arrived at Penguin as an outsider. A clubbable character, he has taken an unusual career path, from a journalist on the Financial Times, to working for the Saatchis, setting up his own investment consultancy, running the Financial Times and then becoming Pearson finance director, despite having no training as an accountant.
But his passion for books is evident. Five years ago, he and his brother bought a bookshop in the small Norfolk town of Holt. For an out-of-the-way independent, the Holt Bookshop attracts a starry line-up of authors for events, including Stephen Fry, due to talk about his new autobiography, which, perhaps not surprisingly, is published by Penguin.

“We are all terribly sentimental about books,” Makinson insists. “It is terribly important to me that we sell lots of wonderful books in my little independent in Norfolk, and when I talk about digital I do sometimes worry that it looks as though I am neglecting all this,” he points to the books on the shelves behind him, “which I am not.”

Guatemala elects a new president and his name is Charlie.

This disturbing article from the Washington Post, which consistently knocks British papers into a cocked hat for the quality of its reportage, shows that Mexican drug gangs have become a force powerful enough to subvert the progress of democracy in Central America.

SAN SALVADOR — Drug cartel violence in Mexico is quickly spilling south into Central America and is threatening to destabilize fragile countries already rife with crime and corruption, according to the United Nations, U.S. officials and regional law enforcement agents.

The Northern Triangle of Central America — Guatemala, El Salvador and Honduras — has long been a major smuggling corridor for contraband heading to the United States. But as Mexican President Felipe Calderón fights a U.S.-backed war against his nation’s drug lords, trafficking networks are burrowing deeper into a region with the highest murder rates in the world.

The Mexican cartels “are spreading their horizons to states where they feel, quite frankly, more comfortable. These governments in Central America face a very real challenge in confronting these organizations,” said David Gaddis, chief of operations for the U.S. Drug Enforcement Administration.

U.S. attention has mostly focused on Mexico. But the homicide rate there — 14 for every 100,000 residents — is dwarfed by the murder statistics in the Northern Triangle, where per-capita killings are four times higher and rising.

In El Salvador, the region’s most violent country, homicides jumped 37 percent last year, to 71 murders per 100,000 residents, as warring gangs vied for territory and trafficking routes. Police and military officials in El Salvador said cartels are increasingly paying local smugglers in product, rather than cash, driving up cocaine use and the drug dealing and turf battles that come with it.

“The more pressure there is in Mexico, the more the drug cartels will come to Central America looking for a safe haven,” Gen. David Munguía Payés, El Salvador’s defense minister, said in an interview here.

The amount of cocaine moving through the region has risen sharply, although the overall volume entering the United States is falling. Cocaine seizures in Central America nearly quadrupled between 2004 and 2007, according to the most recent U.N. data.

The United States has allocated $258 million in anti-narcotics assistance for Central America since 2007 as part of the three-year, $1.6 billion Merida Initiative. But a report this month by the Government Accountability Office found that only 9 percent of the money promised under the initiative has been spent and that U.S. officials had no reliable way to determine whether it was making a difference in the drug war.

‘A paradise for criminals’

In remote, lawless regions of Guatemala, the Mexican organized crime syndicate known as the Zetas is setting up training camps and recruiting elite ex-soldiers to serve as assassins, arming them with weapons diverted from the country’s military arsenals.

Last month, four human heads were left near the Guatemalan Congress and elsewhere in the capital. The national police spokesman, Donald González, said the grisly display was the work of the Zetas and other Mexican traffickers.

“Guatemala has become a paradise for criminals, who have little to fear from prosecutors owing to high levels of impunity,” the International Crisis Group, a conflict research organization, said in a June report. “High-profile assassinations and the government’s inability to reduce murders have produced paralyzing fear, a sense of helplessness and frustration.”

Over the past two years, Guatemala’s top anti-narcotics official, two national police chiefs and the former president have been arrested on charges related to drug trafficking or corruption. Two former interior ministers are fugitives. In May, the Guatemalan president appointed, then removed after international protests, an attorney general who U.N. prosecutors say has ties to mobsters.

In Honduras, where a military coup last year toppled the president, Mexican cartels have established command-and-control centers to orchestrate cocaine shipments by sea and air along the still-wild Caribbean coast, often with the help of local authorities, according to DEA and U.N. officials. Ten anti-narcotics officers were caught smuggling 142 kilos of cocaine last July. In December, Honduras’s drug czar, Gen. Julián Arístides González, was killed after trying to shut down clandestine landing strips Continue reading Guatemala elects a new president and his name is Charlie.

Psychic octopus threatened with a grilling

As everyone knows a psychic Octopus named Paul has correctly forecast all the world cup results so far. National feelings run deep however, and Paul has been threatened with death because of the accuracy of his predictions according to the Washington Post. William Hill admit to losing £100,000 as a result of his predictions. But remember folks, a closer look at Paul will tell you that betting is for suckers.

paul the psychic octopus
paul the psychic octopus

BERLIN (Reuters Life!) – Paul the oracle octopus was given a replica of the World Cup on Monday as a reward for his perfect eight-for-eight record in picking matches as bettors worldwide collected their winnings based on his selections.
The two-year-old octopus with possible psychic powers turned into a worldwide celebrity for accurately predicting the winner of Germany’s five World Cup wins as well as their two defeats. Paul also tipped Spain to beat Netherlands in Sunday’s final.
“We’ve had a lot of offers for Paul but he will definitely be staying with us and returning to his old job — making children smile,” Sea Life spokeswoman Tanja Munzig in Oberhausen told Reuters after presenting Paul with the World Cup replica.
“There’s no rational reason why he always got it right.”
Bettors around the world made small fortunes based on Paul’s uncanny picks, said Graham Sharpe, media relations director at William Hill in London, one of Britain’s largest bookmakers.
“I’ve seen a lot of things in my lifetime but this is the first time I’ve ever seen people making their picks based on what an octopus tells them,” Sharpe told Reuters.

“We had people coming in saying they didn’t know how to place a bet but heard about this German octopus and wanted to bet with him. It’s ludicrous. But he kept getting it right,” said Sharpe. “It’s one of the finest tipping feats ever.”
Sharpe said that anyone who had placed a 10-pound accumulator bet on Paul’s picks from the start of the World Cup would have won 3,000 pounds ($4,500) by the end of the tournament.
Paul’s home at Sea Life aquarium in Oberhausen has been inundated with visitors and media from across Europe. Many networks broadcast his picks live. Hundreds were on hand to watch the World Cup replica lowered into his tank on Monday.
“Paul now wants to say good-bye to the whole world,” Daniel Fey, a supervisor at Sea Life, told Reuters. “He really enjoyed all the media attention but now he’s returning to his old job.”
Yet interest in the 50-cm long octopus remained intense, especially after his last two picks on Friday were once again accurate. Germany won Saturday’s match for third place and Spain won Sunday’s final — as Paul had called it on Friday.
Last week Germans were shocked and distraught when he picked Spain to beat Germany in the semi-final after tipping German wins over Argentina, England, Ghana and Australia.
And after Spain beat Germany, many wanted to publicly grill him. Sea Life installed extra security to protect their octopus.
“We have to remember he’s quite old now — 2-1/2 years is quite old for an octopus,” Fey said.
Probability experts were quoted in media reports saying the likelihood of getting eight consecutive picks right is 1/256. Sharpe said the odds of getting eight straight right was over 1/300. Humbled professors were quoted saying Paul got lucky.
The octopus, considered by some to be the most intelligent of all invertebrates, had a choice of picking food from two different transparent containers lowered into his tank — each with a national flag on it.
The container Paul opened first was regarded as his pick.
Sharpe at William Hill said he had at first been skeptical about the oracle octopus. But he became a believer.
“I suspect that Paul’s predictions could have made about a half a million pounds,” Sharpe said, adding he estimated William Hill paid out 100,000 pounds on his picks at its 2,300 outlets.
“We had people coming in asking who Paul had picked before they placed their bets,” Sharpe said. “I’m sure there were a lot more people too who were too embarrassed to tell you they made their bet based on what the octopus said.”
He said it was the first time in 30 years of work that he had seen “such widely orchestrated use of a non-human tipster.”
Sharpe said he, unfortunately, did not follow Paul’s advice. “It’d have been too embarrassing,” he said. But Sharpe said he was going on holiday soon. “I’m going to the seaside and intend to eat as much octopus as I can cram down as revenge,” he said.

Horse racing betting is going to the dogs.

I spoke to my brother on the phone this afternoon and he was at Newmarket races having a traditional flutter. This fascinating article from the Economist shows how the world of betting has been radically changed by the internet. That having been said, there is nothing like the sight of those beautiful creatures in the summer sunlight to stir the soul, especially with the jockey’s bright colours….hope you didn’t lose too much bro’…….

ON APRIL 9th nearly 45,000 people crammed into Oaklawn, a 106-year-old track nestling in the foothills of the Ouachita mountains in central Arkansas, to watch Zenyatta, a spirited six-year-old mare, win her 16th consecutive race. The next day’s event—the Arkansas derby, which in recent years has become a preview ground for the more famous derby held three weeks later in Kentucky—drew over 60,000 fans. In those two days punters at the track bet nearly $6.5m. Attendance was 38% up on the previous year. Neither the charming old track nor the town itself, with a population of just under 40,000, was built for such crowds. Enterprising locals turned their lawns and shopfronts into parking lots at $20-25 a go.

For racing fans everywhere such a turnout is reason to celebrate; it shows that the sport of kings has not lost its attractions. And indeed attendance remains strong at marquee events, such as the Arkansas and Kentucky derbies or Britain’s Grand National. But although sports betting does well online, horseracing has a particular problem. The business model that has kept it going up to now is being superseded by new and increasingly popular betting methods offered by the internet.

For all the national differences, racing in most parts of the world has two things in common. First, it has provided one of the few legal forms of wagering and bookmaking available to most of the public for much of the past two centuries. Second, the sport depends on money from betting. Practically every national racing association the world over takes its cut from bets placed on races. In Britain 10% of bookmakers’ profits go to the Horserace Betting Levy Board, a statutory body that distributes the funds to British racing interests (mainly purses but also courses, breeders and veterinary science). The levy was put in place when punters had to bet through parimutuel pools (in which odds depend on the number of punters backing a bet) or licensed bookmakers. But now they have other options, so in 2008-09 the total levy collected reached its lowest level in six years, at about £92m.

As other forms of gambling became legal, betting on racing fell. Between 2003 and 2008 the amount wagered on racing dropped by 10% in America and close to a third in Britain. But betting at the track is falling even faster. Punters in America have turned to advance-deposit wagering companies (ADWs) such as Youbet, TVG and Twinspires, which combine the functions of bookmakers and television networks, showing races from around the world. They allow punters to bet using a computer, mobile phone or television remote-control. Dedicated race fans in America can bet on European races in the morning, American ones throughout the day and Australian and Asian ones at night, all without having to leave home. And just as casinos offer free accommodation and meals to big players, ADWs offer redeemable reward points as an added incentive.

Punters in Britain and Australia have an even more attractive option: betting exchanges. The largest is Betfair, which bought TVG in January 2009. Betfair’s revenue last year was £303m, up 27% from the previous year. Around 90% of bets placed through exchanges and more than half of bets made online in Britain are through Betfair. Exchanges allow people to bet with each other, rather than going through a licensed bookie or a parimutuel pool. Betfair makes money by charging a small commission, based on a user’s net profit in a given market.

Unlike traditional operators, the exchanges also permit betting throughout races. Yet although Betfair’s model attracts savvy punters who understand how markets work, its numbers-heavy interface may intimidate casual sport punters. Noting that the odds Continue reading Horse racing betting is going to the dogs.