December 12, 2019

New ‘Great Gatsby’ Book Carries a Hollywood Look

Now the novel is dividing the nation’s booksellers with dueling paperback editions: the enigmatic blue cover of the original and the movie tie-in book that went on sale Tuesday, a brash, flashy version with Leonardo DiCaprio front and center.

The new edition is timed with the 3-D film adaptation, directed by Baz Luhrmann and starring Mr. DiCaprio, that will arrive in theaters on May 10.

So far this year, sales of the paperback with the original jacket art — a glowing cityscape and a pair of floating eyes — have been extraordinary. On Thursday, it was the top-selling book on Amazon.com. At Barnes Noble stores last week, no other paperback book sold more copies. It has landed on best-seller lists for independent bookstores.

The new edition, with its Art Deco glitter, presents a stark choice for readers, as well as retailers who are trying to gauge the tastes of their customers.

At stores like Barnes Noble, with its nearly 700 outlets, both editions will be available. But at Walmart, only the movie tie-in edition will be stocked, a tacit acknowledgment that the discount chain’s customers want books that appear fresh and new (even if they happen to have been released in 1925). And at independent booksellers like McNally Jackson in SoHo, customers who want “The Great Gatsby” can purchase only the original: not a single copy of the new, cinematic edition will be for sale.

“It’s just God-awful,” Kevin Cassem, a bookseller at McNally Jackson, said on Tuesday. “ ‘The Great Gatsby’ is a pillar of American literature, and people don’t want it messed with. We’re selling the classic cover and have no intention of selling the new one.”

Movie tie-in editions are issued regularly in the book business, but rarely has the contrast between two covers of the same title been so pronounced.

The original art, by Francis Cugat, was completed before the manuscript, according to Scribner, a practice that is common in modern publishing but was rare at the time. The art was initially dismissed as “garish” by Ernest Hemingway, who wrote in his memoir “A Moveable Feast” that he was “embarrassed by the violence, bad taste and slippery look of it.”

“It looked the book jacket for a book of bad science fiction,” Hemingway wrote.

F. Scott Fitzgerald, he wrote, told him “not to be put off by it, that it had to do with a billboard along a highway in Long Island that was important in the story.” (Close readers of the book will also see a visual parallel in the narrator Nick Carraway’s reference to the “girl whose disembodied face floated along the dark cornices and blinding signs.”)

While “Gatsby” has been subject to dozens of cover redesigns — and translated into 42 languages, producing covers that read “El Gran Gatsby” and “Gatsby le Magnifique” — it is the original cover that Scribner has kept in print.

Scribner, an imprint of Simon Schuster, typically sells 500,000 copies each year, but in 2013 it has already shipped 280,000 copies, according to the publisher.

E-book sales have been skyrocketing, too: in 2012, about 80,000 e-book copies of “Gatsby” were sold. So far this year, sales have surpassed 125,000.

Those numbers suggest that “The Great Gatsby,” frequently described as the greatest American novel ever, will be among the top-selling books of 2013, a literary palate cleanser to follow 2012, when the American book-buying public gorged on the “Fifty Shades” erotica series.

But Scribner also has high expectations for the movie tie-in edition: it is printing more than 350,000 copies.

The tie-in edition is likely to appeal to “the new reader,” said Nan Graham, the publisher of Scribner.

“The repeat reader is going to buy the classic cover,” she said in an interview. “A person who is more likely to buy the movie tie-in is reading it for the first time. In Walmart, this is the book you’re going to see.”

Cathy Langer, the lead book buyer at the Tattered Cover in Denver, said that by issuing two covers, publishers are trying to reach two audiences that may not overlap.

“It really depends who you are — if you think it’s cool to have the movie star on the cover, then that’s what you’ll buy,” she said. “The more readers a publisher can bring to a book, the better it is for everyone.”

Sales history for movie tie-in editions of novels has been mixed. Original covers typically outperform tie-ins because they are on sale longer and because many consumers are reluctant to make a book purchase that appears to be inspired by the local multiplex.

When both editions of “Eat, Pray, Love” by Elizabeth Gilbert were displayed side by side in bookstores in 2010, the original paperback won out over the movie tie-in, which featured a picture of Julia Roberts eating gelato on a park bench.

“I think the great thing is that there are some people who are reading all the time, and there are people who only read selectively,” said Patrick Nolan, editor in chief and associate publisher of Penguin Books, which released “Eat, Pray, Love,” “but the books work on both kinds of readers.”

One exception was “Revolutionary Road” by Richard Yates, a novel originally published in 1961 that only began attracting hordes of readers — eventually selling 700,000 copies — when the movie tie-in edition was released in 2008 (with Kate Winslet and Mr. DiCaprio on the cover).

Anne Messitte, executive vice president of Knopf Doubleday, part of Random House, said publishers were trying to reach readers who might be more tuned into what was happening in Hollywood than what was on the best-seller lists. (They may also have discovered the book through the “Gatsby”-themed merchandise showing up at retailers like Tiffany and Brooks Brothers.)

“As publishers we’re always looking for new readers, and the transformation of a book into a film can exponentially increase consumer awareness,” she said. “It begins with early press coverage of casting and shooting, and continues through to the film’s prerelease marketing campaign and theatrical run.”

As to whether the new, DiCaprio-ed edition of “Gatsby” would be socially acceptable to carry around in public, Mr. Cassem of McNally Jackson offered a firm no. “I think it would bring shame,” he said, “to anyone who was trying to read that book on the subway.”

Article source: http://www.nytimes.com/2013/04/26/business/media/new-great-gatsby-book-carries-a-hollywood-look.html?partner=rss&emc=rss

Media Decoder Blog: Barnes & Noble Rethinks Its Strategy for the Nook

7:15 p.m. | Updated Barnes Noble, reporting a sharp drop in sales of its Nook tablets, said on Thursday that it would pull back on its ambitions for its device business, shrinking it in size while focusing more on digital content.

Barnes  Noble reported a sharp drop in sales of the Nook.Jae C. Hong/Associated Press Barnes Noble reported a sharp drop in sales of the Nook.

Calling Nook sales over the holiday period an “obvious disappointment,” the bookseller’s chief executive, William Lynch, said the company was taking “significant actions to right size investments” in its digital hardware division through steep cuts in advertising and the manufacturing of devices. Mr. Lynch made his remarks in a conference call with analysts shortly after Barnes Noble reported a 26 percent decline in the fiscal third quarter for the Nook segment, which includes digital tablets and e-readers.

The retrenching of the Nook unit represents a setback to the Barnes Noble plan to build up its device business as a way of staying competitive in the rapidly changing e-book market. Last year, the company separated the division from the rest of its operations and struck deals with Microsoft and Pearson for hundreds of millions of dollars in financing — signs that it viewed its digital business as the linchpin of future growth.

But the Nook, while drawing favorable reviews, failed to gain traction against more popular tablets like Amazon’s Kindle Fire and Apple’s iPad, and its performance over the 2012 holiday season was tepid. Barnes Noble warned last month that Nook sales for the quarter would fall below expectations, and executives hinted recently that the strategy of operating in the highly competitive tablet space had run its course.

“The Nook is not a failure, not technically,” said James McQuivey, an analyst at Forrester Research. “If you go back two years and ask the Nook product managers how many Nooks they would want to sell by now, I bet they have blown past that number. The problem is the fact that the overall tablet market has actually blown way past the Nook’s performance.”

While saying that Barnes Noble remained committed to the tablet and e-reader market, Mr. Lynch said the company would adjust its strategy quickly. “We are not going to continue doing what we’re doing,” he said in the conference call.

The results announced Thursday underscored the challenges. The company said that Nook revenue declined to $316 million for the quarter that ended Jan. 26, from $426 million over the same period a year ago. Losses in the unit increased to $190 million, from $83 million last year, as measured before interest, taxes, depreciation and amortization.

Over all, the company had a net loss in the quarter of just over $6 million, compared with net income of $52 million a year ago. Revenue in all three major units — Nook, retail and college — was down.

The losses were largely because of lower-than-anticipated sales, inventory charges and higher operating expenses because of advertising costs, the company said.

Mr. Lynch said Thursday that a reformulated Nook strategy would focus more on digital content like e-books and magazines, sales of which increased by 6.8 percent in the quarter. He also said the company planned to be a leader in “digital education” and that it expected that to be a growth area.

In the call with analysts, Mr. Lynch was pressed on whether Barnes Noble’s digital content was really proprietary. Mr. Lynch acknowledged that what the bookseller possessed was the ability to sell publishers’ content, but he insisted that it was “a strategic asset that is hard to replicate.”

Wall Street seemed heartened by the company’s acknowledgment that it needed to recalibrate its device business, perhaps anticipating that it would accelerate a breakup of the device and retail units. Shares of Barnes Noble rose 3.35 percent, to close at $15.74.

The company said that there was clear evidence that digital trade book sales were “flattening,” meaning that the bookseller’s physical retail position would be strong in the future. Mr. Lynch said Barnes Noble continued to take market share from other physical book retailers. The company also promoted prototypes for new stores to be opened in malls and the growth of the college bookstore business.

Combined with the announcement on Monday that Leonard Riggio, the company’s chairman and largest shareholder, was considering purchasing the retail segment, the news added a positive gloss to the brick-and-mortar business that it had not had for some time.

That notion got some support with the earnings report. Retail sales fell just more than 10 percent in the quarter, largely because of the closing of some unprofitable stores. But Barnes Noble had largely anticipated the lower revenue and despite the sales decline, retail profits increased 7.3 percent, to $212 million, in part because of higher sales margins and “expense management,” the company said.

Despite the shift in digital strategy, Mr. Lynch emphasized that the company was not abandoning the Nook division.

“Nook Media has been financing itself since October of 2012 due to the strong investment partners we’ve been able to attract in Microsoft and Pearson,” he said. He added that the Nook segment and the physical stores drove traffic to each other and needed to remain in partnership.

But analysts sounded a skeptical note. “Barnes Noble stands at a fork in the road and rather than choose one path, it will likely need to split into two companies and let the retail business go down one path while freeing the Nook division to go down another,” said Mr. McQuivey, of Forrester. “There’s no guarantee that either path will lead to the promised land, but the two units are facing such different challenges and such unique prospects that it doesn’t make sense for them to try to work together to solve such different problems.”

Article source: http://mediadecoder.blogs.nytimes.com/2013/02/28/barnes-noble-reports-big-falloff-in-nook-unit/?partner=rss&emc=rss

Media Decoder Blog: Barnes & Noble’s Strategy Is Questioned as Holiday Nook Sales Decline

For Barnes Noble, the digital future is not what it used to be.

After a year spent signaling its commitment to build its business through its Nook division, Barnes Noble announced on Thursday that holiday sales were disappointing enough to raise questions about the company’s ability to pull off the transformation from its traditional retail format.

Retail sales from the company’s bookstores and its Web site, BN.com, decreased 10.9 percent from the comparable nine-week holiday period a year earlier, to $1.2 billion, the company reported. More worrisome for the long-term future of the company, sales in the Nook unit that includes e-readers, tablets, digital content and accessories decreased 12.6 percent over the same period, to $311 million.

“They are not selling the devices, they are not selling books and traffic is down,” said Mike Shatzkin, the founder and chief executive of Idea Logical, a consultant to publishers. “I’m looking for an optimistic sign and not seeing one. It is concerning.”

The results, covering a period that ended Dec. 29, are a sobering development for the nation’s largest bookstore chain. The declines occurred during what is supposed to be peak buying season. And the Nook unit’s sagging fortunes came despite a 13 percent increase in sales of digital content, suggesting that it is the tepid demand for Nook devices that is dragging down the unit’s performance. Over all, the numbers underscore the difficult challenge the company faces in an increasingly competitive e-reading market.

Barnes Noble has invested heavily in developing a tablet that can compete with offerings from media giants like Google, Apple and Amazon.com. Last April, in announcing a $300 million investment in Nook by Microsoft, the chief executive of Barnes Noble’s chief executive, William J. Lynch, said the company wanted “to solidify our position as a leader in the exploding market for digital content in the consumer and education segments.”

A few months after that, the bookseller began breaking out the financial results of the Nook division, In October it completed its strategic partnership with Microsoft by creating Nook Media, a subsidiary and a signal that it was ready to ride its digital business into the future.

But while Barnes Noble’s most recent Nooks have won critical praise, they have failed to gain significant traction with consumers.

Other companies do not break out sales of their digital tablets, but Amazon has been saying sales of its Kindle Fire were strong. Analysts say Apple’s iPads also appear to be doing well.

“The problem is not whether or not the Nook is good,” said James L. McQuivey, a media analyst for Forrester Research. “What matters is whether you are locked into a Kindle library or an iTunes library or a Nook library. In the end, who holds the content that you value?”

For an increasing number of consumers, he said, the answer is not Barnes Noble.

Though the company’s stock was down only slightly — falling 2 percent to $14.22 — the reaction in the financial world was unsparing. Analysts stopped short of saying that this was a do-or-die moment for the Nook Media division, but they acknowledged that options for a strong digital future were narrowing.

In a note to clients, SP Capital IQ said, “We think this portends greater market share losses for the Nook over the medium term” and downgraded its recommendation on Barnes Noble stock from hold to sell. Barclays said in a note that the Nook’s precipitous decline was “quite concerning” and “below even our modest expectations.”

The declining retail numbers were also troubling when viewed in the context of a rise in sales among independent booksellers. The American Booksellers Association, which has not yet released official holiday sales, estimated Thursday that its members’ sales would be up about 8 percent over last year.

Barnes Noble executives were not available Thursday to discuss the sales numbers. But a statement from Mr. Lynch indicated that the company was searching for a solution.

“Nook device sales got off to a good start over the Black Friday period, but then fell short of expectations for the balance of holiday,” Mr. Lynch said. “We are examining the root cause of the December shortfall in sales, and will adjust our strategies accordingly going forward.”

The most intriguing, and troublesome, question is whether the company can stay in the digital device business at all over the long run. Nook has been expensive to develop and market and the company does not have the hefty financial resources of its competitors.

Other options are strategic partnerships. Microsoft’s investment last spring was seen at the time as a way to promote Nook through a powerful partner. But sales of the Windows 8 operating system have been disappointing and the Nook has been featured as little more than an app among hundreds on the Windows 8 platform.

“It is going to prove to be a missed opportunity,” said Mr. McQuivey of Forrester.

Last month, Barnes Noble announced that Pearson, the British education and publishing conglomerate, was taking a 5 percent stake in Nook for $89.5 million. Analysts said that cash investment was welcome and the partnership with Pearson, a major publisher of educational textbooks, might herald a strategy to move toward dominating an education niche market. Still, that would be a significantly smaller business.

Article source: http://mediadecoder.blogs.nytimes.com/2013/01/03/barnes-noble-reports-tepid-holiday-sales/?partner=rss&emc=rss

Media Decoder Blog: Barnes & Noble Reports Tepid Holiday Sales

9:44 a.m. | Updated Barnes Noble on Thursday reported disappointing holiday sales for the nine-week period ending Dec. 29, particularly for its struggling e-reader business.

Retail sales from the company’s bookstores and its Web site, BN.com, decreased 10.9 percent from the same period in 2011, to $1.2 billion. In a surprise, sales for the company’s Nook unit — which includes e-readers, tablets, digital content and accessories — decreased 12.6 percent over the same period.

The nation’s largest book chain has invested heavily in recent years in developing a tablet that could compete with offerings from media giants like Google, Apple and Amazon.com. While its most recent products have won critical praise, the sales figures emphasized just how hard the battle has been in an increasingly competitive digital market.

The company pointed out that the Nook unit sales decreased even though digital content sales actually increased 13.1 percent. (Digital content sales are defined to include digital books, digital newsstand, and the apps business.) So the decline was a bad sign for the sales performance of their tablets, which offer services like music and video in addition to books.

“We entered the holiday with two great new products, Nook HD and Nook HD+, both highly rated media tablets of phenomenal quality,” William Lynch, the company’s chief executive, said in a statement. “Nook device sales got off to a good start over the Black Friday period, but then fell short of expectations for the balance of holiday. We are examining the root cause of the December shortfall in sales, and will adjust our strategies accordingly going forward.”

Last month, Barnes Noble announced that Pearson, the British education and publishing conglomerate, was taking a 5 percent stake in Nook for $89.5 million. Analysts said that that cash investment — following a $300 million investment by Microsoft last spring — would help the business but not solve its core problems.

Article source: http://mediadecoder.blogs.nytimes.com/2013/01/03/barnes-noble-reports-tepid-holiday-sales/?partner=rss&emc=rss

DealBook: Pearson to Take 5 Percent Stake in Nook Unit

A Nook tabletShannon Stapleton/ReutersA Nook tablet.
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8:35 p.m. | Updated

Barnes Noble moved to shore up its struggling Nook Media division Friday, agreeing to sell a 5 percent stake to Pearson, a British publishing and education company, for $89.5 million.

In a sign of the headwinds the bookseller is facing, the company said in a regulatory filing that holiday sales were weaker than expected and that its Nook unit would fall short of projections for 2013.

The forecast underscores the difficulties Barnes Noble is having as it tries to build out its digital business and compete in a crowded market with giant companies like Amazon, Apple and Google. Sales for the first generation of e-readers have been dropping rapidly as consumers shift to tablets that can offer other forms of media like music, games and video. Just this week, Amazon was trumpeting banner sales of its Kindle Fire tablet over the holidays.

By contrast, worldwide shipments of e-readers fell by 36 percent in 2012, according to a report released this month by IHS iSuppli, a market research firm.

“The market’s growth is slowing down,” said James L. McQuivey, a media analyst with Forrester Research, referring to e-readers. “The easy customers have been snatched up. And the first customers are the best customers, who buy the most books. In the case of Amazon, you can compensate by selling merchandise to later adopters. Barnes Noble doesn’t have that luxury.”

Still, investors seemed to be cheered by the infusion of cash and the tie-in with Pearson’s large education and textbook business. That market has trailed trade books in switching to a digital format, and Barnes Noble could benefit as education books catch up. It could also try to make the Nook tablet a preferred device for educational content.

Shares in the company were up 4.3 percent, closing at $14.97.

Barnes Noble has tried to keep up with larger competitors by producing its own critically praised tablet and has claimed about 25 percent of the e-book market. But maintaining technological parity is expensive for a company that does not sell a broad range of similar merchandise. The chain has struggled under the burden of investing heavily in the Nook business over the last two years.

As a result, the company has sought partners for its Nook business for financial support. Last spring, Barnes Noble spun off the Nook division as a separate company and sold a 16.8 percent stake to Microsoft for $300 million. In theory, Microsoft will help promote the Nook through its Windows software, although a significant push has not yet emerged.

Peter Wahlstrom, a senior analyst with Morningstar Equity Research, called the move “a net positive” for Barnes Noble.

“Digital textbooks are a small, new niche market and a partner like Pearson can only help accelerate that market and that is important, but it is incremental,” Mr. Wahlstrom said.

Pearson’s investment in Nook is the latest in a series of recent steps the company has taken to focus on digital expansion and distribution of its education content and services. Higher education in the United States is already Pearson’s largest single business and in October it acquired EmbanetCompass, a provider of online learning services to North American colleges and universities, for $650 million.

That same month, Pearson agreed to merge its Penguin book publishing business — which does popular as opposed to educational books — with Bertelsmann’s Random House division, which further narrowed Pearson’s focus on educational books.

In a written statement, Will Ethridge, chief executive of Pearson North America, emphasized the advantages of the investment for the learning community. The deal, he said, “will allow our two companies to work closely together in order to create a more seamless and effective experience for students.” He added, “It is another example of our strategy of making our content and services broadly available to students and faculty through a wide range of distribution partners.”

Some analysts questioned whether Pearson was getting its money’s worth. In addition to its initial 5 percent stake in the Nook business, it has an option to buy another 5 percent. Pearson’s investment values the Nook business at $1.8 billion, more than double Barnes Noble’s market value on Friday of $883 million.

Mr. McQuivey acknowledged the potential of the education market but said it had too many variables to be seen as a reliable source of revenue.

“In the long run, if you can make the educational market explode and you get schools to give to tens of millions of children Nooks and put Pearson education content into the Nook, then it would be a long-range strategy for customers,” he said.

Instead, he said that the investment might be an effort by Pearson to help Barnes Noble stay in competition with Amazon.

Ken Doctor, a media analyst with Outsell, a research and consulting firm in Northern California, agreed that propping up a competitor to Amazon might be a motive, but he added that Pearson, with an investment of close to $90 million, was probably looking for more.

“That is why I think it is about preference and maybe really taking the Nook into an education leadership position,” he said.

Among the things Pearson might get for its investment, Mr. Doctor said, was preferential placement of its products on Nook home pages or even a say in how the device evolves over the next few years.

Article source: http://dealbook.nytimes.com/2012/12/28/pearson-to-take-stake-in-nook-unit/?partner=rss&emc=rss

DealBook: S.E.C. Said to Be Investigating Money Manager’s Trading Practices

3:58 p.m. | Updated

The Securities and Exchange Commission is investigating a Los Angeles money manager over accusations of improper trading practices, according to two people with direct knowledge of the case.

The news of the investigation of Peter J. Eichler Jr., the money manager, came as his firm, Aletheia Research and Management, filed for bankruptcy protection late Sunday after a wave of client withdrawals amid weak performance and regulatory issues.

Aletheia, which at its peak managed about $8 billion, has drawn attention for its role in a number of shareholder fights, including a prominent battle with Barnes Noble that it waged alongside the billionaire investor Ronald W. Burkle.

Mr. Eichler did not return repeated requests for comment. Aletheia’s bankruptcy lawyer, Brian L. Davidoff, also did not return multiple calls.

The firm primarily manages stock portfolios for pension funds, foundations and wealthy families. Its strong investment performance — Aletheia’s flagship growth strategy has substantially outperformed the Standard Poor’s 500-stock index over the lpast decade — has attracted marquee clients including Michigan’s state pension fund and the Ewing Marion Kauffman Foundation in Kansas City, Mo. The brokerage units of Goldman Sachs and Morgan Stanley have also invested clients’ money in Aletheia’s funds.

Aletheia, named after the Greek word for “truth and disclosure,” was founded in 1997 by Mr. Eichler, who spent a decade at Bear Stearns before starting his own firm.

He is a third-generation Los Angeles money manager. Mr. Eichler’s grandfather started Bateman Eichler in 1931, which became one of the larger West Coast brokerage firms before it was sold to Kemper Securities in 1982. He is also the grandson of Henri de La Chapelle, an original partner of Paine Webber Jackson Curtis.

The S.E.C.’s is said to be looking into allegations of trading misconduct, including whether client account were manipulated through the late allocations of trades. It is also examining whether money-losing trades were moved from client accounts into Aletheia’s accounts, according to a person with direct knowledge of the case who requested anonymity because he was unauthorized to discuss the case publicly.

John Nester, a spokesman for the S.E.C., declined to comment.

Aletheia’s woes are the latest in a series of setbacks for the firm. In June 2011, it paid the S.E.C. $400,000 to settle civil charges brought by the commission related to its maintaining deficient books and records. Around that time, Aletheia named Steve Olson, a former federal prosecutor, as its president, only to see him depart within months.

Mr. Eichler was also sued in 2010 by one of the firm’s senior executives, Roger B. Peikin, who says he was wrongfully terminated. The lawsuit accused cited misconduct by Mr. Eichler of misconduct related to “trading practices, general disregard for regulatory controls, wanton expenditure of corporate assets for Eichler’s personal benefit, and overall neglect of the business side of Aletheia’s operations.”

In 2009, Proctor Investment Managers, a private equity firm based in New York, and Aletheia filed lawsuits against each other over the terms of a deal in which Proctor took a 10 percent stake in Aletheia.

Despite the various legal setbacks, Aletheia still managed $1.8 billion as of June 30, according to securities filings.

Aletheia owes millions of dollars to its creditors, according to its bankruptcy filing, which was made in United States Bankruptcy Court in Los Angeles late Sunday. Creditors include Proctor Investments, which is said to be owed $16 million by Aletheia; California’s state franchise tax board, which is said to be owed $2.5 million; and the law firm Bingham McCutchen, which has a claim for $730,000.

Mr. Peikin’s lawsuit highlighted Mr. Eichler’s lavish lifestyle, citing the use of private jets and $18,000-a-night hotel suites. It said that Mr. Eichler spent $7 million renovating the firm’s offices at 100 Wilshire Boulevard, a prestigious building with sweeping views of the Pacific Ocean.

The lawsuit also depicted Mr. Eichler as a tyrannical boss who ruled Aletheia “with an iron fist.”

“By hijacking control of Aletheia’s board and eliminating Peikin from all management decisions, Eichler has successfully rid himself of all internal controls, allowing him free reign to operate Aletheia as his personal fiefdom,” the complaint said.

Mr. Eichler, 54, who is driven around Los Angeles in a Maybach sedan, has recently made two large real estate purchases, according to records , buying a $4.5 million home in the Pacific Palisades and a $15 million beachfront house in Malibu.

Aletheia has appeared most prominently in the business press media for a number of large stock investments alongside Mr. Burkle, including a big stake in Barnes Noble in 2010. The position led to litigation over whether Mr. Burkle and Mr. Eichler were improperly colluding to accumulate a controlling position in the company.

During the case, a Delaware judge mocked Mr. Eichler for repeatedly following tagging along with Mr. Burkle on his investments. The judge wrote that the chance for Mr. Eichler to discuss stocks with Mr. Burkle was like an aspiring songwriter “getting to trade licks and lyrics with Bob Dylan.”

Aletheia Research and Management’s bankruptcy petition

Article source: http://dealbook.nytimes.com/2012/11/12/los-angeles-money-manager-aletheia-files-for-bankruptcy/?partner=rss&emc=rss

Media Decoder Blog: Barnes & Noble to Introduce New Video Service for Nook Devices

Barnes Noble said on Tuesday it would introduce a new video store for its Nook products this fall, the latest expansion of the bookseller’s digital content.

The service will allow customers to stream and download movies and television shows for a fee onto TV’s and mobile devices, while storing the content in the Nook cloud. The video catalog includes HBO shows, like “Game of Thrones” and “True Blood,” and movies including “The Artist” and “Toy Story 3.”

Barnes Noble has focused heavily on its digital offerings to compete with retailers like Amazon and Apple. In April, it received a boost when Microsoft said it would invest hundreds of millions of dollars in the bookseller’s digital division.

Barnes Noble’s Nook enters a crowded market of digital rental services that let viewers download movies and television shows to mobile devices. The video streaming service would be similar to Apple’s iTunes in that viewers could rent single episodes, movies or whole TV seasons. Wal-Mart entered the streaming business in 2010 with its $100 million acquisition of Vudu, which allows viewers to rent high-definition movies on Internet-enabled televisions. Many new television sets now come with the Vudu and Netfix apps built in. Verizon and Redbox recently partnered to introduce their own streaming service.

Major studies have taken a blow in home video revenue in recent years as DVD sales and traditional rentals decline. Deals like the one with Barnes Noble help bring in additional rental revenue and offer viewers another outlet on which to find content. That’s in combination with home-grown streaming services like HBO Go, which requires users to authenticate that they pay for Time Warner’s HBO before accessing hundreds of episodes of past and current shows on tablets and mobile devices.

William J. Lynch, the chief executive of Barnes Noble, said in a statement, “As one of the world’s largest retailers of physical video discs and digital copyrighted content, our new Nook Video service will give our customers another way to be entertained with a vast and growing digital video collection, as part of our expansive Nook store.”

Barnes Noble currently has about 25 percent of the e-book market. In August, the company reported a loss of $41 million, or 78 cents a share, in the quarter ending July 28. Nook sales were flat over the previous year, at $192 million.

On Tuesday, Barnes Noble also signaled its intentions to build a bigger presence in Britain. It said the company Dixons Retail, which owns the electronics retailers PC World and Currys, would sell Nook products in 600 stores. Barnes Noble also named Patrick Nourvillois as a managing director responsible for building the Nook brand “outside the U.S. across the globe.”

Article source: http://mediadecoder.blogs.nytimes.com/2012/09/25/barnes-noble-to-introduce-new-video-service-for-nook-devices/?partner=rss&emc=rss

Bookstores Drop Comics After Amazon Deal With DC

Amazon, seeking to make its coming Kindle Fire tablet as appealing as possible, negotiated a deal with DC Comics for the exclusive digital rights to a hundred popular graphic novels. Among the series: Superman, Batman, Green Lantern, the Sandman and Watchmen.

Barnes Noble, with a tablet of its own to nurture, did not like this one bit. Two weeks ago it removed all the copies of the physical volumes from its 1,300 stores, saying it would not carry any book if it were denied the right to sell the digital version.

Books-a-Million, the third-largest bookseller with 231 stores, followed suit last week, making the same argument.

Booksellers of all sorts used to pride themselves on never removing any book from their shelves, but that tradition — born in battles over censorship — is fading as competitive struggles increase. Last year, in a sort of foretaste of the present conflict, Amazon temporarily removed the “buy” buttons for the publisher Macmillan as part of a struggle over e-book pricing.

This time, the stakes are once again high. The two chains are desperate to avoid becoming showrooms for Amazon’s digital warehouse, which would quickly send them to the bookstore graveyard like their former colleague Borders. DC Comics must stay relevant in a world where many of its young male fans read everything on mobile devices — not the most congenial medium for comics. And Amazon must preserve and extend its dominance.

In comics and other online forums where the issue is being debated, everyone is unhappy with someone. Amazon is being accused by some of throwing its considerable weight around to the detriment of readers and the larger culture. DC Comics is being criticized by others of placing greed over its fans. Barnes Noble is alternatively being accused of throwing its own weight around and of cutting off its nose to spite its face. Even the comics’ writers are getting some heat.

As Amazon seeks over the next few years to expand its tablet line, these collisions over content are likely to become routine. “It looks like content providers and online purveyors have a few more rounds to go before the Wild West is tamed,” said Lorraine Shanley, a publishing consultant.

DC Comics, a division of Warner Brothers, says it is being misunderstood. But on its own Web site, it said the books would be available “exclusively to Amazon’s newly announced Kindle Fire,” with no qualification. Even the possibility that fans could have access to the books on their iPad through the Kindle app seemed disallowed.

DC now says the books will be available on other e-readers through the Kindle app. “Just because we’re starting with Amazon, this is not the be-all and end-all of our digital strategy and distribution,” said Jim Lee, co-publisher of DC Entertainment, the parent company of DC Comics. He added, however, “We are not at liberty to discuss exactly when” the comics would be available on other e-readers, citing the company’s nondisclosure agreement with Amazon.

Amazon declined to comment about the deal.

DC executives seem surprised at the speed with which they had alienated some of their devout fans. Some threatened piracy, like NinjaZilla, a poster on a comics forum who wrote, “What will me and my poor iPad do? I’m so sorry DC! Because it is not like I can download all those comics for free, oh wait yes I can, and now I guess I will and maybe I will download every comic DC produces while I am at it!”

Mr. Lee said, “We say to our fans, have a little patience.”

A lot of patience might be required. DC says it took two years of work with Amazon to complete the process of converting the comics into something that could be read and appreciated on the Kindle Fire.

Independent bookstores, which are rarely offered exclusives by publishers, argue that they are bad for consumers.

“A competitive retail market where products are available from lots of different places creates greater choice and a competitive pricing environment,” said Oren Teicher, chief executive of the American Booksellers Association. “Choice is better than no choice.”

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Female Magazine Fans Flock to Nook Color

The Nook Color has surprised publishers of women’s magazines like O, The Oprah Magazine, Cosmopolitan and Women’s Health by igniting strong sales that rival — and in some cases surpass — sales on the iPad.

The success was not so easily predictable for a device that has been on the market only since November and faces stiff competition from Apple, Amazon and the Android-based tablets.

“We didn’t really know what to expect,” said Liz Schimel, executive vice president for digital media for Meredith, publisher of Family Circle, Better Homes and Gardens and other women’s magazines. “We regarded it as sort of a test. Would the Nook magazine experience resonate with consumers? We were extremely pleasantly surprised. I think Barnes Noble has been very smart about creating a whole brand and a campaign that’s really targeted at their core mass audience which overlaps nicely with our audience.”

Recent best-seller lists for magazines on the Nook Color bear this out. Magazine top sellers include US Weekly, Shape, Women’s Health and Every Day with Rachael Ray. Men’s magazines like Maxim and Men’s Health rounded out the top 20 late last week, but they were the outliers.

On the surface, the reason for the strong performance of female-oriented publications on the Nook is relatively straightforward. Generically speaking, the iPad and other tablets are men’s toys, while the Nook Color and other e-readers are more popular with women. According to data from Forrester Research, 56 percent of tablet owners are male, while 55 percent of e-reader owners are female. Women also buy more books than men do — by a ratio of about 3 to 1, according to a survey last year by Bowker, a research firm for publishers — and are therefore more likely to buy devices that are made primarily for reading books.

But publishers also believe the resonance of the Nook Color among women highlights the vast difference in consumer markets. Some women, at least, seem to prefer their electronic reading devices to be simpler, something they can read on. Tablets with Rock Band, GT Racing and high-res cameras? That’s guy stuff.

And Barnes Noble has marketed the $249 Nook Color toward females. Ads show women and girls reading it in various states of relaxation and repose: at the beach, in bed, on the couch. On Barnes Noble’s Web site, a bubbly woman named Kate walks users through a guided tour on how to use the device.

The company has not said how many Nook Colors it has sold, beyond putting the figure in the millions and saying that it is the most successful product in Barnes Noble’s history. But since November, the company said more than 1.5 million magazine subscriptions and copies of single issues had been sold on the Nook Color. This week, in an attempt to build on the success of its reading devices, Barnes Noble is expected to debut a new e-reader.

Apple and Amazon do not release sales figures, and the data that publishers report about sales through the iPad and the Kindle are limited. But their top sellers include far more magazines with heavily male audiences, like Wired and Rolling Stone.

The Nook Color and its black-and-white counterpart were most likely part of what made Barnes Noble so appealing to Liberty Media, which last week made a cash offer of $17 a share, around $1 billion, for the bookseller.

Meredith publishes two magazines, Family Circle and More, on the Nook Color and has plans to add more because the sales have been strong. Nook Color subscriptions are outselling the magazines Meredith publishes on the iPad, where only single-issue sales are available, by about 2 to 1. Hearst, which publishes O and Cosmopolitan, is selling tens of thousands of subscriptions on the device each month. Rodale, which publishes Women’s Health, Runner’s World and Prevention on the Nook Color, is selling about five times as many subscriptions through Barnes Noble as it is selling single issues on the iPad.

The bookseller offers 136 magazines in its digital newsstand — a range from The Economist to Country Living. Sales for most magazines now are small, around several thousand each.

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Stocks Close Lower on Wall Street

The retailers Gap Inc. and Aeropostale each lost more than 14 percent after cutting their profit forecasts for the year, in part because of higher costs for raw materials. Gap’s sales have been sluggish, a worrying sign for investors who are counting on shoppers to lead a recovery in consumer spending.

Gap’s results pushed down other clothing companies who have been hit hard by the rising price of cotton and shoppers who are reluctant to splurge. Polo Ralph Lauren and J.C. Penney each dropped nearly 4 percent, while Urban Outfitters fell nearly 3 percent.

At the close, the Dow Jones industrial average was down 93.28 points, or 0.7 percent, to 12,512.04.

The Standard Poor’s 500-stock index fell 10.33, or 0.8 percent, to 1,333.27. The Nasdaq composite fell 19.99, or 0.7 percent, to 2,803.32.

One exception to the gloom among retailers was Barnes Noble. The bookseller jumped 30 percent after Liberty Media offered to buy the company for $1 billion in cash.

A stronger dollar has also hurt stocks. The dollar rose against the euro after the Fitch ratings agency downgraded Greece’s debt three notches further into junk status, escalating worries about the European debt crisis.

In recent months, markets have fallen when the dollar rises against the euro because the stronger American currency has signaled that European countries are still struggling to get their debt under control.

“A stronger dollar and a stronger U.S. market can coincide, but not when the U.S. economic data are weak,” said Quincy Krosby, chief market strategist for Prudential Financial. “This has been a stronger dollar that has come because of another currency weakening, not a stronger U.S. economy.”

Concerns about the strength of the economy pushed government bond prices higher as investors sought out safer assets. The yield on the benchmark 10-year Treasury note fell to 3.15 percent from 3.18 percent late Thursday. Bond yields fall when their prices rise.

Oil prices settled at $99.49, up $1.05, after trading lower most of the day on new signs that demand for gasoline is falling. Even as most energy stocks fell, Anadarko Petroleum jumped 5 percent on hopes that the company would owe less than expected to the oil giant BP for its part in the Deepwater Horizon disaster.

BP said it would receive a $1 billion payment from Moex, which owned a 10 percent stake in the Macondo oil well in the Gulf of Mexico. The settlement was for a smaller amount than Moex investors feared, and suggested that Anadarko, which owned 25 percent of the well, would also pay less to BP.

BP’s stock rose more than 2 percent on expectations that other companies will share costs related to the Gulf of Mexico oil spill.

There were two notable exceptions to the downward trend. The software company Salesforce.com rose more than 10 percent after its first-quarter profit beat expectations. The social networking and job search site LinkedIn added to Thursday’s gains, when it more than doubled in its stock market debut. The company rose 2 percent.

In Europe, shares moved lower late in the session. The FTSE 100 index of leading British shares ended 0.1 percent lower, while Germany’s DAX was off 1.2 percent. The CAC 40 in France was down 0.9 percent.

The euro slid to $1.4197 from $1.4311 late Thursday.

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