Borders is Hurting

It's prudent to keep an eye on the companies that sell what you produce. And Borders continues to be in trouble that is so bad that the company has bounced its CEO and other top managers. Borders has also close to being delisted from Nasdaq. If you don't follow business issues, then you might not realize how big a problem this can be for the following reasons:

• Credit rating agencies will degrade the credit status of the company, meaning that getting the money it needs to operate will be more difficult.
• Delisting puts vendors on guard, so the company will likely also have bigger problems getting the stock it needs to sell.
• Loans and other financial agreements often have financial covenants, or agreements that certain measures of company performance will not fall below certain benchmarks. That can include keeping the stock listed. If the company breaks a covenant, it can find itself suddenly owing a lot of cash, which isn't good if you're short of cash to begin with.
• Although a delisted stock can still be traded "over the counter," practically speaking, it's far less liquid and, therefore, less attractive. Lower stock price means a harder time raising money through issuing more stock.
  

Ron Marshall, who is a private equity firm founder and someone with experience in turnaround situations, is now in place as temporary CEO. But that's not necessarily going to help:

Before his tenure at Pathmark, Marshall held senior management roles at Dart Group Corp.'s Crown Books unit and at the college bookstores unit of Barnes & Noble Inc.

That book retailing experience might be a little dated, said Michael Norris, a senior analyst for Stamford, Conn.-based Simba Information. He said he believes Jones' approach had been effective, but that investors must have thought it wasn't working rapidly enough.

The final straw was likely that the company's sales dropped this holiday season by 11.7 percent compared to the same time last year. Same store sales - a big measure of how well a company is doing when established for at least a year - dropped by 14.4 percent at Borders locations and by eight percent at Waldenbooks.

That's even worse than you might think, because retailers typically make 60 percent of their sales at the holidays, so the impact is magnified. Not that the stock can drop that much - it's under 60 cents a share, compared to the $11.60 a year ago.

Writing News Roundup (1/5/2009)

A look at publishing, writing, and freelancing:

• Wedding Copyright Cops -- An artists' and musicians' rights group in Spain has been crashing weddings in an attempt to document unlicensed use of music. But the group got fined for violating the privacy of the bride and groom. (Ars Technica)
• E-books Slowing Gaining Ground -- Widespread use of e-books probably won't occur until the devices are much cheaper and the experience better. (BusinessWeek)
• New York Times Sued for Copyright Infringement -- GateHouse Media is suing the New York Times because the Boston Globe's community web sites are allegedly using material from GateHouse without permission. (AP)
• Holocaust Memoir Cancelled -- Because of strong public skepticism over the book's authenticity, Berkeley Books is cancelling the publishing of a Holocaust memoir and demanding its money back. (Publishers Weekly)
• Online News Rockets Ahead -- According to a recent Pew pole, online news reading has pulled ahead of newspapers for the first time. (Ars Technica)
• BBC Review Fakes Car Battery Failure -- A review of a Tesla electric car on the BBC's Top Gear program took a big hit when it turned out that the reviewer had allegedly misled viewers into thinking that the car ran out of power when it hadn't. (The Guardian)
• E-books Hit Cellphones -- The cellphone-delivered novel is nothing new in Japan. Now people are starting to use cellphones as readers in other parts of the world. (BusinessWeek)
• New York Times Trying to Raise Money -- To stave off the problem in meeting more debt payments than its cash flow will allow, the New York Times is selling its headquarters, the Boston Globe, and its stake in the Boston Red Sox (oh, will Yankee fans ever forgive them for owing the share in the first place). (Silicon Valley Insider)
• Amazon Author Stores -- Amazon is launching new Author Stores with some name writers, and might expand the program to all authors whose books it sells. (Publishers Weekly)

Negotiating Client Budget Reductions

Yes, economic times are tough. Yes, some industries are particularly hard hit. Yes, some number of clients are going to push back on rates, crying that they are in budget difficulties. And, yes, it's true: many are and might not have more money to spend.

But, as I've written before, no, your first reaction should not be to drop your prices in a bid to make clients happy. There are a few reasons:

• Some clients may be desperate, but there will also be many interested in knowing how much they can save by crying poor.
• Anyone who wrote for technology publications in the late 1990s knows that when the dot com bubble burst, specialized magazines were going out of business right and left, and the remaining ones reduced their rates. (To be fair, the rates were related to high demand for writers and their relative scarcity to the work load.) If a client says, "We'll pay less until times are better," realize that the probability that times will get better enough for them to raise rates is about zero.
• Clients often talk, and once you're known for writing for those who pay less, the ones who pay more may want to revisit your rates.
• The more you give in on pricing, the more you have to work to make your living. Eventually your life is there to support your work, not the other way around.

To reduce your rates is to devalue what you are doing. There may be times it is necessary, but that is probably a rare occasion. More often you can try renegotiating to balance out the value you are giving up. Here are some approaches that can work:

1. Reduce what you offer -- Look to see where you can scale back what you provide to the client. Mind you, this is something you do out in the open so they understand that they are getting less because they are paying less. Maybe you don't search for art, or write something shorter, or provide fewer options.
2. Better payment terms -- If budgets are smaller, it might be that the client can pay faster or pay for a bank transfer instead of your waiting for a check to clear. Be careful, as some clients will promise anything knowing that the accounting department will work on its usually time frame.
3. Get regular work -- It takes a certain amount of time to find work. Get to some reasonable estimate of how long that is, and you can use your bottom line hourly figure to determine how much that time is worth to you. Discount an assignment by less than that, and you're actually ahead because you open more time for assignments and other marketing. So trade off a somewhat lower fee for guaranteed work.
4. Improve other terms -- There may be other conditions that, if changed, either improve cash flow, open time, or provide some other benefit whose financial value you can calculate. It may be that having more time to work on an assignment lets you manage your schedule more effectively. If you're doing work that requires outsourcing sections, it could be that you can have the client directly pay the other people (though you do face the potential risk of their making deals independent of you, which may or may not be a problem, depending on your business model). It might be that you can get money forwarded for expenses, rather than receiving payment after the fact.

As with all forms of negotiation, creative problem solving can take you a long way and even turn what could have been an income drop into a net gain.

Book Review: The Ultimate HTML Reference

If you've ventured at all into web sites, blogging, and social media, you find yourself running into HTML. Visual editor tools are fine for getting the effects you want into writing, but that is slow and limited. For the greatest flexibility in formatting text, creating tables and lists, inserting pictures, and many other tasks, a knowledge of HTML is handy. The Ultimate HTML Reference by Ian Lloyd is a reference book that should be close by a dictionary, thesaurus, or volume on English usage.

I've found myself frequently reaching for it when trying to remember how to control a table layout in a blog entry or double-checking how to get a link to open in a new window. The material is complete so far as I can tell, and the organization, including TOC and index, is strong and lets me easily find what I need. At $45 it isn't a cheap volume, but could easily save you its cost in time efficiency in your first time or two of using it.

Is HuffPo Stealing Content?

According to Whet Moser on Chicago Reader, Huffington Post is lifting entire concert previews from online media covering the Chicago arts scene. According to Moser, this isn't an isolated case or two, but an ongoing series:

If you go to their Chicago Concerts page, there's a whole list of concert previews from us, Time Out Chicago, Centerstage, and the Onion's Decider--and they're just taking entire pieces.

Moser goes on to provide side-by-side examples that are just a click away. HuffPo does give credit to the source and writer, but according to Moser's post, fails to ask anyone at the publications if it's OK. Presumably none of that $25 million influx of money is going to the outlets that actually do the work, though maybe the editor who writes new headlines for each is getting paid something.

This is disgraceful. Either Huffington and her business, not social undertaking, is willing to play by the legal, ethical, and moral rules, or they are indulging in complete hypocrisy every time they skewer conservatives for supposedly not doing enough for those with too little. Or is this just an example of faux do-gooders deciding that their "missions" excuse them from the niceties that bind the rest of us? As far as I'm concerned, if you take something without permission and without payment, it's theft. And HuffPo does get something out of this, as my BNET colleague David Weir points out:

Note to Arianna: This is not kosher! Of coure, it’s doubtful that Huffington herself is even aware of this practice, but somebody in her organization knows what they are doing. This would appear to be an attempt to bolster the amount of content, which on the web correlates directly with increased traffic, and boosting SEO, which yields highly-valued organic (free) search engine traffic.

Writing News Roundup

A look at publishing, writing, and freelancing:

• Golly, Former Tech Staffers Freelance -- Two CNET reporters turn into talking heads, covering how a former tech journalist is now freelancing. Of course, they don't interview him on camera, and the incredulous air of "You mean he can really find work in this tough environment; don't all the newly manufactured journalists create competition?" The lack of understanding, especially as they wonder whether the public will want "professionals" without bias, is profound. (CNET)


• Where's Your Online Pulitzer, Baby? -- The Pulitzer Prize will accept nomination from online-only publications, showing that the change in the landscape might now be considered official. (The New York Times)


• Reed Elsevier Pulls Mag Sale -- Publisher Reed Elsevier, which owns LexisNexis, has decided to end its attempt to sell its trade publication business, which, in the U.S., includes a whole lot of titles, some of which are Variety, Publishers Weekly, and a whole bunch of prominent names in construction, electronics, food service, and publishing. As the company can't sell off the assets, I do wonder whether it will start shutting down more of its least profitable titles, many of which use freelancers. (The Telegraph, Reed Business Information U.S.)


• Three Kills and a Classic -- Think the younger crowd is lost to publishing? Then consider that Nintendo, the manufacturer of the two top gaming consoles in the world, is partnering with HarperCollins to sell ebook versions of classic literature on a subscription basis for the portable Nintendo DS, turning the game device into an ebook reader. (London Times)


• All Things Cut -- NPR cuts seven percent of its workforce and will can two shows in March. (Wall Street Journal)


• Newsweek to Thin Magazine and Staff -- Newsweek is going to undergo an editorial makeover that will likely result in a thinner magazine, and it's going to cut additional staff. (Reuters)


• Living the YouTube Life -- There are people making six figure incomes, including one doing a humorous celebrity show with the investment of $2,000 in a camera, $6 in fabric for a backdrop, and some unknown amount for worklights from Home Depot. Income doesn't necessarily mean writing service pieces for a consumer glossy. (The New York Times)


• What's Not to Love -- or Hate? -- Fortune makes the case for and against Sam Zell's acquisition of the Trib. (Fortune)

Business Planning and Marketing Classes in January

As I do periodically, I'm teaching some on-line courses at Freelance Success (FLX members get a discount, but they're open to anyone). Instead of one at a time, however, I'm experimenting and teaching both the business planning and marketing classes simultaneously, because there was a split among those who wanted one or the other. Anyone potentially interested can click the links or can also email me for additional information.