Are You Ready for the Future

What are some challenges that you foresee in your segment of the industry?
Holton: Obviously 2005 was a big year for children’s books with the publication of “Harry Potter and the Half-Blood Prince” and with many new readers of the series starting in on book one, “Harry Potter and the Sorcerer’s Stone.” In 2006 we will need to keep those Harry Potter readers engaged with our exciting new titles, while at the same time educating new parents about the importance of sharing books with their babies and toddlers.

What are some of your strategies for making this year profitable?
Holton: At Scholastic, we are focusing on bringing the right books to the right market. The children’s book market is made up of a lot of different channels, each with its own marketing, promotion and customer needs. We are focusing our spending on individual markets, while cutting back on more generalized promotion. At the same time, this channel focus is helping us reduce our returns, which in turn, improves profitability.

What changes has Scholastic made to prepare?
Holton: We are in the process of decentralizing our creative team, and have realigned the sales and marketing department to more closely serve our customers’ needs in bringing books to market in each channel.

What kinds of trends do you see beyond 2006?
Holton: The convergence of print media and electronic media will continue to be a trend beyond 2006. What form that will take is yet to be seen. To date, kids have not embraced e-books, but with the right gadget, it is conceivable that kids will ultimately move to more technology-based reading. Despite the technology, however, families and kids are looking for ways to spend time together, and books are still one of the great human connectors. So, I think kids and adults will continue to be drawn to beautiful, quality children’s books.