Thursday, December 13, 2007

BoSacks Readers Speak Out: On Roy Reiman, Time's Maghound, Bad Math and Prints Future

BoSacks Readers Speak Out: On Roy Reiman, Time's Maghound, Bad Math and Prints Future.

Re: The Future of Print Publishing and Paid Content
Scott Karp's thoughtful piece on the future of publishing had a fairly straightforward central premise: since readers know that online content doesn't cost the publisher anything to distribute, they won't pay as much for online content as they will for content in print. Karp said that consumers "intuitively understand that it doesn't cost the publisher nearly as much to make the content available digitally as it did to put all of those books physically on a shelf."
Are manufacturing and distribution costs what make print different from online? I'd suggest that the answer is a resounding no. I think many customers pay a premium for content in print because print has intrinsic qualities that make it more valuable.

Let's look at another guide to the relative value of print and online-the advertising revenue stream.

There's a serious difference between the CPMs of print and online advertising. An ad that runs in a magazine or newspaper commands a much higher price per exposure than an ad on the magazine or newspaper's Web site . . . even if the ad appears in the same content in each medium.

The cost difference is a pretty clear indication that print has higher value for an advertiser. It's hard to imagine that advertisers would pay a premium for print if they didn't recognize additional value, or that publishers wouldn't charge more for online advertising if they could.

We could debate the relative merits of the two media for years. In fact, we have. But why print CPMs are higher than online CPMs isn't as important as the fact that they simply are.

Karp's piece ended just when he got to the good stuff. He mentioned that the "citizen-journalists" who contribute to BostonNow prefer to be published in print rather than online-another way of saying that print offers higher value . . . which is why writers prefer to see their work in print and why marketers are willing to pay more for print advertising.

As practitioners of the publisher's craft, we owe it to ourselves to promote the advantages of print. It's certainly in our financial interest to do so, and the intrinsic merits of different media aren't insignificant. Writers recognize the difference. Advertisers pay for the difference. Of course publishers need to embrace the Web, and of course exciting opportunities await online . . . but it's worth remembering that from the customer's perspective, the value of print (like the value of any medium) is completely unrelated to a publisher's costs.
(Submitted by a Publisher)

RE: BoSacks Speaks Out: Bad Math Among eBook Enthusiasts
Tim O'Reilly is a very smart publisher. I'll add a different angle. Let's assume that he's wrong and that prices do fall to, and remain at, $5 a title. What publisher and author combination can make money that way? Reading hasn't reduced in volume because the prices are too high - books just aren't that expensive. If you have a current business model under which most titles don't even make back the pitiful advances that authors get, and where the cost of the actual paper is only about $1.50 a copy, then dropping the price by 60 to 80 percent is going to mean that publishers won't be able to afford to print anything that isn't going to be wildly successful. Current backlists may stay around (if the publishers have acquired the necessary rights), but forget the variety of titles coming out now. You'll be down to a handful of authors who can generate the necessary sales. Then
supply and demand will kick back in, because there are those massive infrastructures to feed, and prices will head back up anyway. Some individual authors might be able to self publish, but if they're getting 35 percent of $5, that's $1.75. Take out costs of design and production, and maybe they're at $1 a book if they're lucky, which is the inadequate stream of money they made from publishers - too low to support self-publishing. So $5 a copy, if really gutting the paper model, would really leave book publishing virtually dead.
(Submitted by a Writer)

RE: Can Time Inc.'s Maghound Concept Work?
This seems like an awful lot of work, with a whole bunch of folks needing to pay attention to the details, for not much convenience. If I want a magazine, I will subscribe, often for years at a time (to keep those annoying renewal notices at bay.) Who really thinks there are consumers with the time, interest, and inclination to work through a market basket of different magazines on a try-it-I-might-like-it basis? This has a funny odor to it, smelling something like the old Publisher's Clearing House stamp programs, and we all remember how that ended up. Sorry, I just don't get it. Seems very last century in the internet world!
(Submitted by a Director of Mfg and Dst)

RE: Can Time Inc.'s Maghound Concept Work?
This is overblown.. . . They've been fooling with this for years, even printed and mailed a catalog in 2004. It's just Time Inc's new age version of PDS, and is not likely to be a big hit. There's trouble in Stanford, don't you know . . .
(Submitted by a CEO of a Distributer)

RE: Roy Reiman Speaks Out; Setting the Record Straight:
Hats off to Mr. Reiman for clarifying this muddled issue. Roy Reiman is so correct regarding the significant differences between a national magazine business model and a regional magazine, particularly with regard to circulation levels. Years ago the brilliant and venerable Bill Ziff, owner of Ziff-Davis, stated a very similar thesis in a Folio article that encapsulated most, if not all, of the great truths about running a profitable magazine business, i.e., serving the reader first and foremost is the key to profitability.

What I find particularly troubling is the obvious question that RDA avoids mentioning, i.e., If Reiman Publishing didn't make money (and make money hand-over-fist) why did RDA bother to buy it? If the Reiman business model didn't work at the time of purchase, the senior management at RDA and all of its many consultants would never have pursued the purchase particularly given RDA's own profit problems at the time. I would love to see what happens to the renowned Reiman renewal rates over the next three years and the consequent cost of replacing lost renewals due to the dissatisfaction of subscribers who were sold on the premise of no advertising and are now experiencing a magazine that is just another advertising vehicle.
(Submitted by a VP Circulation Marketing)

Re: How an electronic newspaper could become profitable
Bill Richards may know the newspaper business from a reporter's perspective, but he doesn't understand the business side. Eliminating paper by going electronic does not eliminate the need for circulation. The paper still has to be promoted and fulfilled -- and audited. Emarketing is a lot cheaper than traditional marketing, but it still has to be done.
(Submitted by an Unknown)

RE: Roy Reiman Speaks Out; Setting the Record Straight:
What a refreshing new take, people in the know directly responding in an open forum.

Bob, I believe this is what you have strived for all these years, an open honest discussion among the leader's of the publishing industry.

Now that the record is set straight with RDA and Mr. Reiman, here's what I want to know:
How much more downsizing, outsourcing and consolidation will happen in '08?

How are today's publishers going to make a profit in '08 and beyond?

What is being done to counteract the rising costs of paper, postage and manufacturing costs?

What efforts are underway to increase advertising spend in print? In digital?

Is a no-advertising model like Mr. Reiman suggests in the works?
Who today has a national title that could support itself without advertising revenue given the rising costs of paper and postage?

There seems to be a big surge in outsourcing of non-core business functions (latest is production management and print buying). What are the printers doing to bring value added to the publishers without giving away the profit margins? What are the publishers doing to help their printers and paper suppliers stay in business?
(Submitted by a Director of MFG)

Re: BoSacks Speaks Out: Mea Culpa on RDA, Reiman and Ripplewood.
Bob: I thought I had seen the article before too, but figured maybe it was a slow news week. It is good to read the viewpoints of each of you in the same posting, as now. As an observer, and a subscriber to these magazines, I don't believe my core thoughts on Ripplewood's approach has changed much, but today's post certainly adds perspective.

That you are at the 'epicenter' of a huge volume of communications regarding this business and yet retain your sanity, perspective, and optimism, is a major accomplishment, beyond the ken of most.
(Submitted by a Publisher)

No comments: