A podcast about books, art & life — not necessarily in that order
Editors and publishers must now learn how to use telephones.
(In a bonus piece of cluelessness, this article also focuses on publishers’ debilitating problem of returns from bookstores . . . without ever mentioning e-publishing! God forbid you mention a distribution venue that eliminates the cost of physical production, shipping and returns in an article about cutting costs!)
This article covering the collapse of Lehman Bros. and the “death of Wall Street” isn’t as good as the multi-part extravaganza that the WSJ ran about Bear Stearns. There are way too many players involved, too small a space in which to tell the story, and so the death knell — Goldman and Morgan becoming plain old banks — is treated as an afterthought.
That said, the article features this awesome passage:
Rolling up to the meetings at around the same time was Goldman’s chief, Mr. Blankfein. A Goldman aide, referring to days of meltdowns and meetings, carped to Mr. Blankfein: “I don’t think I can take another day of this.”
Mr. Blankfein retorted: “You’re getting out of a Mercedes to go to the New York Federal Reserve — you’re not getting out of a Higgins boat on Omaha Beach,” he said, referring to the World War II experience of a former Goldman head. “So keep things in perspective.”
I don’t know whether the Sulzberger family exerts any influence on the NYTimes‘ editors. All I know is that today’s business section seems pretty heavily loaded on the Bernard Madoff case. Bernie’s a legendary money manager who appears to have been bilking hedge funds and the super-wealthy out of their money in a huge (he says $50 billion) Ponzi scheme.
Now, I know it’s a big story (although no one knows how deep the losses really are yet), but I get the feeling that if it weren’t about the pain of wealthy people and socialites, we might not see four articles totaling more than 4,500 words in one edition: 1, 2, 3, and 4.
The best part about today’s Lifestyles of the No-Longer-So-Rich coverage in the Times is that the paper chose this very day to debut a new bi-weekly web column about . . . money strategies for the wealthy!
Of course, these strategies aren’t just for the wealthy! Writes columnist Paul Sullivan, “While his [Robert Seaberg, head of wealth management at — no lie — a branch of Citigroup, the bank that lobbied for a $300 billion backstop from the U.S. government and plans to fire 52,000 people next year, most of whom I assume are not super-wealthy] findings are geared toward the highest end of the investing community, people at every wealth level should take note.”
After all:
While losing 40 percent of $100 million gives those investors more wiggle room than that same decline on $100,000, it still requires them to re-evaluate their view of risk, if not a change to their lifestyles.
Good to know!
For my part, I’m just happy that Amy & I started watching Arrested Development this month. I expect to find out that Madoff had a cross-eyed Judy Greer for his secretary:
Or that his sons are really amateur magicians or anxiety-prone dilettantes. But Life doesn’t always imitate canceled TV, I guess.
(Update! The NYPost has a couple of pieces on the story, too. I was convinced that one of their quotes was by an alias for Andre 3000, but it turns out that Montieth Illingworth is a real person! Oh, and it turns out that Madoff’s key strategy was betting on the spread between bids and asks, which — to my untrained ear — sounds a bunch like the “vacuuming up nickels” strategy of LTCM that went awry when it scaled up. And I’d be remiss if I didn’t mention the case of a long-time friend of my mother who got into trouble similar to this, although in his case, I don’t think it wasn’t a Ponzi scheme as much as a case of “I just lost some of X’s money on some bad investments, so if I just move some of Y’s money into X’s account, no one will be any the wiser once my next batch of investments pay off.” And the missing money added up to around $2.5 million, which is bad, but not as bad as (allegedly) $50 billion.)
Boy, I was just not feeling the bloggitry yesterday. I’ll make up for it with some great Unrequired Reading links! Just click “more”!
Continue reading “Unrequired Reading: Dec. 12, 2008”
Merck gave a “state of the biz-nass” presentation today. Here’s their statement about it. As with every other major pharma company, they plan to
My favorite statement was this sentence on the company’s “focus”:
The Company is focused on developing novel, best-in-class or follow-on treatments for patients in primary care, specialty care, and hospital settings.
That is, they’re “focused” on making all types of drugs for all settings.
About four years ago, our company hired an internet marketing guru who was supposed to “bring us into the 21st century” or something. I nicknamed her “The Orient Express.” This wasn’t because she was Asian — she wasn’t — but because she’d managed, within a single week, to alienate every single branch of our 50-person company: editorial, sales, circulation, production, and accounting. Even the office manager hated her. In fact, the only thing that prevented me from throwing a stapler at her head was the fact that my computer monitor was blocking my path.
I started to get called into strategy meetings around this time, because I seemed to know something about the internet and some of my marketing suggestions were bearing fruit, despite the fact that I occasionally walked around the office dressed as if I’d just broken out of prison.
During one of the Orient Express’ presentations on how she was going to reshape our company, she busted out a breakdown of the money were spending on web-hosting, e-mail management, and other online services. She repeatedly hammered the point of how much money we were spending this way, when we could cut those costs by moving things in house (and maybe hiring people she knew, including her son, to handle things). I kept waiting for her to say what we would do after making these changes, but this appeared to be the extent of her “online strategy.”
After her umpteenth explanation of how much money we were wasting by using outside providers, I spoke up. I said to the group (including the owner of the company), “Y’know, the premise of my magazine is that, if you don’t do something really well, then you’re probably better off paying someone else to do it. Especially if you’re a small company. As far as I know,” looking over at the owner, “we’re not exactly hemorrhaging cash, so I’m not sure we need to make a priority of cost-cutting. I mean, it’s cool to want to save us money, but it seems to me that it’s one thing to shrink costs, and another to build new sources of sales.”
She announced that if we just listened to her, we would become a cutting-edge online content provider! I realized then that I should’ve brought a Bullshit Bingo card into the meeting. She had no plans for creating new online products for us to sell. All she saw was our online expense and how it could be smaller.
I was reminded of the Orient Express and her fixation on cost-cutting for its own sake when I read this BusinessWeek article on Edgar Bronfman’s Warner Music Group last week. Warner’s album sales have grown under Mr. Bronfman’s tenure. The numbers are pretty anemic, but they’re positive when the competition is in decline.
The point the article makes is that Mr. Bronfman did cut costs at the company, but savings weren’t treated as their own goal:
How did Bronfman do it? He cut Warner’s artist roster nearly 30%, ditching more than 50 acts that were no longer selling well. He refused to pay big bucks to keep the likes of Madonna and Nickelback out of rivals’ hands. And he found some $300 million in annual cost savings. Result: Warner had more time and money to focus on new potential hitmakers.
Other music companies have slashed budgets for artists and repertory (A&R), the department that finds and nurtures talent. Not Bronfman, whose hundreds of scouts spend their nights in clubs, from Manchester to Seoul, and their days on MySpace, finding new chart toppers such as James Blunt, Gnarls Barkley, and Panic At The Disco. The strategy is paying off: Warner’s share of U.S. sales of new releases is up 7% since 2004, vs. a decline of 2% for the rest of the industry, according to Nielsen SoundScan, which tracks music sales
It’s one thing to say, “There’s no way Madonna can earn back the advances on her albums; we can save $100 million by letting her walk,” but it’s another to actually put some of that money into developing new acts.
What happened to the Orient Express? At our Christmas party that year, I warned her explicitly about alienating the company that was handling our web-hosting and site updates. That company was also an ad agency that had long relationships with several of our magazines. Maybe I was too friendly in my warning. Days later, she sent the company a fax stating that we no longer needed their services. Two days after that, she was shitcanned. She hadn’t lasted 100 days.
I’m still a bit under the weather, so I won’t offer much commentary on these posts about book publishing. There was a big shakeout yesterday at Random House and layoffs at Simon & Schuster. Along with last month’s announcement that Houghton Mifflin Harcourt was “freezing” acqusitions — leading to the resignation of its publisher — the industry looks like it’s reeling.
Kassia Kroszer thinks that imprints don’t mean much and that independent publishers have a great opportunity ahead, since they don’t need to worry about generating profits that would satisfy a multinational corporation.
Eric Wolff thinks that publishing needs to return to its roots as a hobby for literary rich folk.
Oh, and here’s a link I’ve been sitting on for a little while: Theodore Dalrymple on used bookshops and inscriptions.
Talk amongst y’selves . . .
Let’s give thanks to a bunch of fun links! Just click “more”!
Continue reading “Unrequired Reading: Nov. 28, 2008”
From the intro of Eric Dash & Julie Creswell’s long NYT article on the collapse of Citigroup:
Our job is to set a tone at the top to incent people to do the right thing and to set up safety nets to catch people who make mistakes or do the wrong thing and correct those as quickly as possible. And it is working. It is working.
–Charles O. Prince III, Citigroup’s chief executive, in 2006
I believe that anyone who uses “incent people” rather than “give people an incentive” is prone to taking shortcuts and shouldn’t be allowed to gauge risk for other people.
. . . unless you buy this report on the Global Pain Market!