Friday, May 18, 2007

BoSacks Readers Speak Out: On jobs, editors, Circ, $70 magazines

In all matters of opinion, our adversaries are insane." Oscar Wilde (Irish Poet, Novelist, Dramatist and Critic, 1854-1900)

BoSacks Readers Speak Out: On jobs, editors, Circ, $70 magazines

RE: BoSacks Speaks Out: The $70 Magazine!
Bob, Because you understand the mechanics of printing you wanted to be impressed by what the medium can really accomplish in terms of beautiful printing using state-of-the-art reproduction processes on extraordinary paper. However, what is being sold is not beauty, but (you said it yourself) "style". Behind style is an idea that if expressed at all, even if not well, may find an audience. Of course, like beauty, style is certainly in the eye of the beholder -- a beholder who is obviously willing to pay through the nose for it. One thing for sure, there's no accounting for taste, as only the self-indulgent would pay $70 or more for a magazine, a sure reflection of the some of the imbalances rife in our economy and society.
(Submitted by a Printer)

RE: BoSacks Speaks Out: The $70 Magazine!
Interesting, but in a way not that different from specialized newsletters or magazines that cost multiple hundreds for a subscription. If you have what the right audience wants, you can charge a lot. In fact, I'm becoming more certain that the future of publishing isn't what the large companies do, but what individual writers and photographers will create. For example, I'm considering self publishing a book that a number of publishers have passed on. The audience - professional and aspiring writers - is one that would probably be willing to shell out a reasonable amount, it's an area where I have some expertise (a number have been paying me around $160 for six-week online courses), and I could keep all the profits myself. Given that publishers expect me to do the writing on tight deadlines for little and then, for books at least, do the majority of the marketing, I see less and less reason to bother with them.
(Submitted by a Seasoned Professional Writer)

RE: BoSacks Speaks Out: The $70 Magazine!
The first thing I did (a decade ago) when I acquired our flagship title from a failing publisher was to raise its cover price: from a (then-high) $5 to $6. (Of course, I also gradually increased the page count and quality of the book.) The old publisher tried to wriggle out of the sale, on the basis that "no one will pay $6 for a magazine" but nothing in our sale contract said I couldn't raise the cover price, so I won.

I now sell my titles at $7.50 (that flagship title), $5.95 and $6.00 and I am about to launch (spring 2008) a semi-annual book with a cover price of $10. All of this without color (except on the cover) or glossy, high-end production values. But we deliver value: real editorial. We restrain advertising to 25% of the total book, and depend on circ (primarily newsstand) for about 75% of revenue.

If readers like your work, they *will* pay good money for it. But you have to remember to put the reader, not the advertisers, first. Advertising is good money, and excess liquidity sloshing around Madison Avenue has made the American (world?) publishing business sloppy, greedy, and lazy. But when circ is king, the publisher is forced to treat readers like the gods that they truly are. Readers are why we are in this business.
(Submitted by a Multi-title Publisher)

RE: BoSacks Speaks Out: The $70 Magazine!
Bob: Thoroughly depressing; The next issue of aRUDE should be made up of silvery reflective Mylar pages, so that the reader can admire him-or-herself, then on the inside covers, write compliments inspired by the views just seen. That would be a perfect follow up to the Hilton issue. The age of Narcisism is indeed here, populated by people living vicarious lives, indifferent to the realities most of us swim in. There is a 'market correction' in our cultural future. p.s. If aRUDE does a mylar-paged issue, i want credit for the idea.
(Submitted by a Publisher)

RE: The World May be Flat - Dateline Delhi
Bo: What's the big deal about outsourcing all those tedious, difficult, and unpleasant tasks that, fifty years ago, were called "work"? We live in the most wonderful country in the world, and anyone who doesn't think so should just move. I mean, where else can you get such GREAT programs as American Idol? And, so MANY wonderful celebrity magazine's to choose from, every week! If you gave a quiz to American teens about Paris Hilton's latest antics, like, they'd score higher, like, than teens in ANY other country in, like, the entire world! Forget about algebra, physics, or chemistry. That stuff is HARD, and after all, that's why those Chindians are there, to do that work. I mean, Detroit's latest gigantic SUV's even have in car TV's so you can watch Idol and drive, at the SAME time! Nobody else has all these wonderful things....nobody! We've shipped all our investment money to Iraq, so we won't be doing any public works or infrastructure repairs for GENERATIONS, so who needs skilled labor, anyway? Don't Worry, Be Happy!
(Submitted by a Senior Director of Manufacturing)

RE: The World May be Flat - Dateline Delhi
This is an immature and whining take on reality. Standing on a hill? Oh, you mean you figured that you were safe, so it was ok to send other jobs overseas? It shows you how morose and self-piteous her thinking is when you realize that she writes, "I can't even complain, as U.S.- based Reuters' workers did when their jobs were outsourced, that the quality of journalism will suffer as a result," when these reporters will watch a video of a city council meeting and have no possibility of asking a question or knowing anything of the greater context of the meeting. . .
(Submitted by a Writer)

Re: All-out outsourcing
Insightful article. I suspect that it's only a matter of time before this begins to become even more prevalent in our industry. Editorial in some companies has been outsourced for some time now and prepress is already being outsourced to India with some prepress houses serving as the liaisons between the Publishing companies they serve and those responsible for the outsourced work in foreign lands. At the end of the day, it's all about the bottom line and if the same work can be done more cost effectively overseas then unfortunately that's all that seems to really matter these days.
(Submitted by a Group Production Manager)

Re: BoSacks Speaks Out: Marketers to Mags: Give Guarantees or We'll Walk
"hardeeharhar. I should be making a million bucks a year as a consultant for the industry.

Our policy has been to offer proof positive of our paid rate base (actual copies printed! USPS Periodical Statement of Ownership!) to any advertiser upon request. Our policy has been this way for over a decade, since we found out about the rampant insane chicanery and outright lies that competitors in our market were waving around in front of their marks.
(Submitted by a Publisher)

Re: How to Sink a Newspaper
We all just have to keep our heads until this internet thing blows over.
(Submitted by an Industry Supplier)

RE: Craigslist founder questions print future
The common question is, "If you're so smart, how come you're not rich?" The better question many times is, "If you're so rich, how come you're not smart?"
(Submitted by a Printer)

Article on GM Wants More Newspaper Advertorials
hey, didn't that pcworld editor get canned for not running favorable articles? an advertorial is where you bribe the sales staff with money and free content. a p.r. placement is where you bribe them with lunch. :)
(Submitted by an Industry Pundit)

Re: BoSacks Readers Speak Out: On Mr. Magazine, Time Inc, MPA, Editorial Integrity, and More
Bob, I sort of thought you had jumped into a deeper pool than most of us imagine, with your Copake Town Council win. But, I am glad you did it. It is as important to bring what you have to Copake as it is to share it with us, your readers, and admirers.

Yeah, I sort of miss your rants, too, but to me, Rants are not the centerpiece of your Blog; the Digest Presentation of industry information and news is. I can only wonder at the volumes of chaff you comb through to glean the newsworthy pieces you send our way. That you see fit to periodically add your own well- considered thoughts, is a major plus, and adds greatly to the VALUE of your Blog. That I take the time daily to read through what you have suggested is worthy news, is a sort of Consumer Loyalty that the Advertisers in our Publications only dream about.

So, keep up the good work. Bob, as best you can, and continue to become yourself, even if we might real fewer words from your own keyboard!
(Submitted by a Publisher)

Magazine Suspends Its Run in History

History is the witness that testifies to the passing of time; it illumines reality, vitalizes memory, provides guidance in daily life, and brings us tidings of antiquity."
Marcus Tullius Cicero (Ancient Roman Lawyer, Writer, Scholar, Orator and Statesman, 106 BC-43 BC)

Magazine Suspends Its Run in History
By CHARLES McGRATH _r=1&oref=slogin

After more than 50 years American Heritage, the magazine that furnished not just the minds but, in its original hardcover format, the dens of generations of American history buffs, is suspending publication, its editor, Richard F. Snow, said last week.

The bimonthly magazine, which is owned by Forbes Inc., has been for sale since January, and in the absence of a buyer, Mr. Snow said, the publishers have decided to put the next issue, June-July, on indefinite hold. For at least the time being, however, American Heritage will continue to maintain a Web site.

That leaves Mr. Snow and his staff, which has dwindled to four from a dozen, in limbo, where they have been since just before Christmas, when they were informed that the magazine was going on the block. "It's a little like sailing the Flying Dutchman through the fog," Mr. Snow said. "On the other hand, I've been here for 40 years, so I can't really bitch about job instability."

The magazine has always been a bit of an anomaly among American publications.

The circulation is currently 350,000, or as high as it has ever been, and hundreds of those readers can still be reliably counted on to write in arguing about the true causes of the Civil War or, as happened recently, to point out that the author of a World War II article doesn't know the difference between the M-1 rifle and the M-16, which didn't come in until Vietnam.

American Heritage was founded in 1954 by James Parton, Oliver Jensen and Joseph J. Thorndike Jr., refugees from Life, who from the beginning broke most of the rules of magazine publishing. They determined not to accept ads, for example - on the ground that there was a "basic incompatibility between the tones of the voice of history and of advertising" - and instead charged a yearly subscription of $10, a figure so steep at the time that readers were allowed to pay it in installments. They also published in clothbound, hardback volumes with full-color paintings mounted on the front.

The format was an instant hit with readers, who instead of tossing back issues often shelved them in their bookcases, but it initially confounded the United States Post Office, which decreed that American Heritage could use neither the book rate nor the periodical one. That ruling was eventually overturned, but not until the magazine had almost bankrupted itself by paying for parcel post.

The first editor of American Heritage was Bruce Catton, a Civil War historian who wrote in the inaugural issue in December 1954 that "the faith that moves us is, quite simply, the belief that our heritage is best understood by a study of the things that the ordinary folk of America have done and thought and dreamed since first they began to live here." In the beginning, at least, that meant a fair amount of WASPy nostalgia and a steady ration of stories about the Civil War. That inaugural issue, for example, includes a piece about a Union general who was falsely accused of treason in 1862, as well as articles about the country store, the Fall River steamship line and a lament by Cleveland Amory about the decline of New York men's clubs.

Mr. Snow, 59, went to work in the American Heritage mailroom in 1965, when Columbia University insisted he take a little time off, and joined the staff full time when he finally graduated, in 1970. He has been there ever since, and in 1990 he became the magazine's sixth editor, succeeding Byron Dobell.

Either he was a perfect fit to begin with, or over the years he has taken on many of the characteristics of his workplace, for he now closely resembles his own magazine. He is quite youthful looking, on one hand (probably because he is one of those people who mature early and then never change), and a little old- fashioned on the other. He speaks in perfectly turned paragraphs and may be the last person left in New York to unself-consciously use "indeed" as an exclamation.

He favors gray suits and sweater vests, his telephone manners are impeccable, and he has a bubbling, high-pitched voice that turns a simple "hello" into something that resembles the opening bar of a Broadway show tune. Like his magazine he has an almost insatiable curiosity and is particularly expert on the Revolutionary and Civil Wars, not to mention Coney Island amusement rides at the turn of the last century.

Mr. Snow has been at American Heritage long enough that he can remember when it was an empire in the mid-'60s, employing 400 people, with the magazine as a flagship for what was in effect a publishing company selling books, many of them by some of America's best-known popular historians, by direct mail. He was managing editor in 1980, when the magazine ceased publishing in hardback (except for subscribers who wanted to shell out extra for what Mr. Snow now calls a "padded, leatheroid edition"), and in 1982 when, bowing to economic necessity, it began soliciting ads.

"We all felt very bad about taking advertising," Mr. Snow recalled. "But it had the odd effect of making us feel we were in touch with the world. There was a sense of a living connection to a process that was actually sort of fun - or at least it was fun while we were getting ads."

American Heritage remained more driven by circulation than by ads, however. According to Scott Masterson, a senior vice president at Forbes and president of American Heritage, the magazine was losing money when Forbes bought it in 1986 and then bounced back for a while. But in the late '90s, Mr. Masterson said, it failed to reap the kind of profits that many magazines did, and after 2001 it experienced the same downturn that afflicted the magazine business in general and had trouble recovering.

Part of the problem was the Internet, Mr. Snow said. "We're really a general interest magazine," he said. "We don't play to a history buff in any narrow sense - like the Civil War re-enactors, for example. They can go on the Web and get thousands and thousands of hits."

Three years ago Mr. Snow and Mr. Masterson decided to embrace the magazine's aging readership and rejiggered American Heritage to appeal more specifically to baby boomers, mostly publishing articles about things that had happened in their lifetime. The formula was an editorial success, Mr. Snow said, yielding articles like one that appeared in the February-March issue about the Wrecking Crew, an unheralded studio band that played on many hit records in the '60s and '70s. But it failed to provide the hoped-for bump on the business end. "Forbes has been very, very patient," he said. "but basically they've been carrying us for a while."

Over lunch recently at Keens - another venerable New York institution, decorated with old clay pipes and playbills and where he pointed out, for the sake of accuracy, that the famed mutton chop is really lamb - Mr. Snow lamented that the next issue of American Heritage might never get into print.

"We're just about finished with the issue, and we have a particularly fine piece by Teller, the nontalking half of the Penn and Teller team," he said. "It's a superb piece of writing, an essay about a fellow named David Abbott, who was a great American magician."

Mr. Snow added, "You know, some issues are better than others, but I don't think there's been a single one where anything really bored me."

He said he was still unsure about his own fate, but if need be he could go back to writing historical novels. "I've written four," he said. "Two were loathed by everyone who read them, but two actually got published." And no matter what happens, he has worked out a crucial point of his severance: He gets to keep his Royal manual typewriter.

"That was the typewriter I was assigned in 1970, and it will follow me to the grave," he said, and he added: "I wish this were more a sign of granitic stability, but in fact it's a sign of my computer incompetence. I use it just to type labels, but it works beautifully. Every year someone comes in and cleans it. I don't think he's paid by Forbes. He's some spectral presence who just turns up."

Auction for Dennis Titles Coming Down to Brownridge Against Burkle

"I never drink water because of the disgusting things that fish do in it."
W. C. Fields (American Comic and Actor, 1880-1946)

Auction for Dennis Titles Coming Down to Brownridge Against Burkle
Former Wenner Media Vet Brownridge Lost Out on Time4Media Properties By Nat Ives article_id=116753

NEW YORK ( -- The auction for Dennis Publishing's Maxim, Blender and Stuff is shaping up as a showdown between two oversize personalities, ex-Wenner Media veteran Kent Brownridge and supermarket king turned media magnate Ron Burkle. Maxim is the strongest asset in the auction. The magazine's paid circulation has found a plateau of 2.5 million and its ad pages grew 20.2% in the first quarter, according to PIB.

Final round next week
The third and final round of bids are due May 23, and the pool of contenders has shrunk along the way. There are rumors and dark horses, of course. Nautic Partners, the private-equity firm with $1.8 billion under management, is said to have taken a look late in the process, but it isn't clear whether Nautic will bid next week. American Media is even being mentioned a possible contender, on the notion that the company's outrageous $1 billion in debt will be alleviated by its planned sale of five magazines, freeing up some cash to buy some better properties.

But Mr. Brownridge and equity backer Quadrangle Group, which made an unsuccessful play together for the 18 magazines Time Inc. recently auctioned off, are clearly determined to get some new magazine assets. And Mr. Burkle's Yucaipa Cos. looks equally interested in bulking up in publishing -- particularly after Yucaipa's Source Interlink Cos. agreed to pay $1.2 billion for Primedia's enthusiast titles on Monday.

Mr. Brownridge, Yucaipa and the investment bank handling the auction, Allen & Co., did not respond to messages left seeking comment.

Maxim the top asset
Maxim is the strongest asset in the auction. The magazine's paid circulation has found a plateau of 2.5 million and its ad pages grew 20.2% in the first quarter, according to the Publishers Information Bureau. But it also has struck a bevy of licensing deals and extended its content to digital platforms quite effectively. Five-year-old Blender reported average paid and verified circulation of 744,263 for the second half of last year, up 7.4% over the period a year prior, according to the Audit Bureau of Circulations, and its ad pages rose 35.6% in the first quarter. Stuff's paid and verified circulation fell 4.8% to 1.25 million but its first-quarter ad pages are up 11%.

If Mr. Brownridge and Quadrangle take the spoils, by the way, Mr. Brownridge will find himself in competition with his old boss, Jann Wenner. Blender and Rolling Stone compete in the music category while Maxim and Men's Journal have some overlap among men.

Observers said the Dennis portfolio may go for somewhere in the range of $220 million to $250 million. If a deal gets done, Dennis founder Felix Dennis will retain ownership of The Week, his growing current-events weekly.

Wednesday, May 16, 2007

BoSacks Speaks Out: The $70 Magazine!

Such labored nothings, in so strange a style, Amaze th' unlearned, and make the learned smile"
Alexander Pope (English Poet, 1688-1744)

BoSacks Speaks Out: Thanks to my author- friend David Renard, I have been introduced to the style press phenomenon. Until David actually grabbed me by the sleeve and showed me, I will confess that I had no idea there were large stores selling magazines for $89 and up, hundreds of them. That is right, a whole newsstand store of magazines with price tags that would boggle the mind of the average publisher. Just to be very clear, that price I mentioned of $89 is for each issue. And that was not the most expensive . . . not by a long shot.

Having a strong manufacturing background, I have to tell you that for that kind of pricing I was mighty disappointed in the printing quality of most of them. They were OK, but at that price level I would have expected more. . . much more.

Anyway, not only do they have magazines at these price levels but David tells me that the sell through rates are much higher than our industry standard.

So Mr. and Ms. Publisher. . . What do you make of that? Here is where Mr. Magazine will be correct about the future of magazines. Expensive niche printed publishing only for those who can afford it.

Have you got an opinion on any of this? I would love to hear it.

The $70 Magazine! Boutique Glossies Rampant in Soho
by Nicholas Boston boutique-glossies-rampant-soho

The new issue of aRUDE, an outsized independent style and culture magazine, is offering something new for its cover price of $9.95: empty pages. It's a "vanity issue dedicated to Paris Hilton," said its Nigerian- born editor and publisher, Iké Udé. Save for a Mondrian-inspired centerfold collage of the socialite herself, the issue contains only page after page of empty space, punctuated with questions to the reader. "Is she a genius because she works smart and not necessarily hard?" "Aren't you jealous of her?" "Who should she marry?" Readers are instructed to fill in the blank space with their answers, artwork and any shout-outs to or about Ms. Hilton, then to return this material in the envelopes provided to aRUDE's headquarters on 17th Street in Chelsea, where the content will be scanned and re-edited into a "real" magazine, to be re-issued in late summer.

"We want to democratize the editorial contribution in a magazine framework, where it's open to readers to become creators," said the Nigerian-born Mr. Udé, whose contributors include the professional dandy and partygoer Patrick McDonald, F.I.T. professor Valerie Steele and reedy Russian model Larissa Kulikova. "It's kind of like"-you know what's coming- "a blog in print, in a way."

Just what is the deal with those expensive downtown glossies like aRUDE, euphemistically referred to as the "style press"?

"It's a term that came out of France, where magazines that were high-end boutique magazines would be called la presse de style," said David Renard, author of the recently released book The Last Magazine (Universe), in which he argues that the survival of the magazine-publishing industry at large lies in innovations made by the independents. "But instead of just being style as in fashion, style in essence means more design, in a sense, or trendy or cool."

Lafayette Smoke Shop, located at the corner of Lafayette and Spring, is a hotbed of the pricey publications. "All tourists; many, many tourists" is how the store's manager described his clientele-along with the moneyed Soho residents who need to fill coffee-table space, of course.

"I bought one called SOON, in Chinese, French and in English-$70 cover price!" said Samir Husni, chair of the journalism department at the University of Mississippi and author of the annual Samir Husni's Guide to New Magazines, now in its 22nd year. "You can tell that those boutique magazines are done for the people within the industry, rather than the people outside the industry. It's a celebration of our inner circle. Most of them you can find in New York, but the minute you reach Des Moines, they're gone!"

But most of the style press is sustained not by newsstand sales but from ads taken out by-and sometimes custom-designed by-high-end fashion houses, retailers and other luxury brands. "There's no way they can make money without advertising," Mr. Renard said. "They'd have to be selling at $20, $30 a piece-sometimes that's impossible! They want to keep the American concept of low prices."

To get the most desirable advertisers, editors have to woo first-rate style mavens, photographers and graphic designers-usually friends or friends of friends-to contribute work for free. ("Diane"-as in von Furstenberg-"will always take out an ad with us," Mr. Udé said.) Then they have to get the finished product into the right hands. "In New York, with the right wholesaler for New York City, you can make 500 copies look like you are everywhere. Everywhere!" Mr. Renard said. "To whom? To the advertisers and to the tribe that you're trying to attract, let's say the downtown 'cool set.' Only 500 copies-that's 30 stores."

Most of the magazines are primarily visual, repositories for art photography. One exception is 032c, published by partners Jörg Koch and Sandra von Mayer-Myrtenhain out of Berlin; the latest issue, which will retail for $20.99, arrives in New York at the end of May and contains lengthy essays on contemporary art and politics. "Readers are editors, artists, gallerists, architects, students at Columbia and N.Y.U., and, of course, fashion people- designers, P.R., photographers, stylists," Mr. Koch said of his shiny export.

Trace ($5.99) is one title that has extended its brand beyond print. In 2003, the magazine started Trace TV, a cable-television channel in France, which is now available in the U.S. on the Dish Network. In Trace's editorial offices on Broome Street, editors converse in a kind of lingua universale, lapsing from English into French and occasionally Spanish, with intermittent exclamations in other tongues. Editor in chief Claude Grunitzky, 36, the son of a West African diplomat who himself speaks six languages, founded the magazine in 1996 in modest digs in London. Over the next 10 years, he relocated the operation to downtown Manhattan and morphed into a kind of style-press mogul. The magazine is now published in three separate editions-American, British and French- with each distributed to appropriate linguistic markets worldwide. Mr. Grunitzky calls himself a "cross-cultural guru."

"When you look at these 'style press,' what they give us is the cornerstone from which we can build the future for print," Mr. Husni grandly claimed. "Because those magazines cannot exist or have the impact that they have if they existed in any other medium - not online, not on TV."

At any rate, Mr. Udé eagerly awaits the results of his little editorial experiment. "It's not easy to do this," he said. "But thank God it's not easy! If it would be easy, then every Dick and Harry would be doing it."

World's Classiest Mag Facing Failure

"Experience taught me a few things. One is to listen to your gut, no matter how good something sounds on paper. The second is that you're generally better off sticking with what you know. And the third is that sometimes your best investments are the ones you don't make."
Donald Trump

World's Classiest Mag Facing Failure -classiest-mag-facing-bankruptcy.php Donald Trump is turning out to be about as successful in the magazine business as he was in casinos-in other words, not very.

Trump, the quarterly lifestyle magazine he publishes through a licensing arrangement, is on the verge of financial meltdown, according to sources. "They owe money to everybody and are being sued every which way," says one insider. Another source claims the title will likely go on hiatus unless Trump or some other backer comes to the rescue with additional financing. "Will Donald come in and help reinvigorate it with some personal funds? It's all a matter of timing," adds the source.

Trump has been around since 2004, when it was launched as Trump World. Last year, Premiere Publishing Group, which has a five-year licensing deal with Donald Trump, went public. Since then, its staff has dwindled from around 25 to fewer than 10. Among the refugees is editorial director Aaron Sigmond, who left in March. Sigmond says he and Premiere CEO Michael Jacobson "are longtime friends and remain so. I wish him and his company the very best."

Jacobson did not respond to a call for comment; nor did Trump. Each holds a 14.6 percent stake in Premiere, which had incurred net losses of $5.6 million as of the end of last year, according to a filing with the Securities and Exchange Commission. Under the terms of his contract, Trump is also supposed to receive a $135,000 royalty payment for each issue of Trump that gets published. Considering how much of his income seems to come from cheesy licensing deals these days, we're sure he's anxious to keep getting those checks.


Burkle Eyeing American Media?

Stephanie D. Smith

Though billionaire Ron Burkle may have satisfied his temporary yearning for media expansion with his recent acquisition of Primedia's Enthusiast titles, he could still have his eye on another one, according to several media analysts. On Monday, Source Interlink Cos., which Burkle controls as a part of his investment firm Yucaipa Cos., said it would acquire Primedia's Enthusiast Media division, a collection of 70 titles including Motor Trend, Hot Rod and Surfer, for $1.2 billion. But the New York Post reported May 3 that Yucaipa Cos. also has its eye on the debt-ridden American Media Inc., home of Star, Shape and Men's Fitness.

Analysts believe there could be incentives to merging AMI's assets with Yucapia's media holdings, which are said to include culture bimonthly start-up - for the third time - Radar.

For one, AMI's Distribution Services Inc. is one of the largest magazine distribution companies and would fit well with Source Interlink, a distributor of magazines, electronics and DVDs. Many of AMI's other assets are challenged - Star, for example - and the company is saddled with more than $1 billion in debt. But analysts say now that Primedia's assets are a part of Source, AMI would become a smaller part of the portfolio, lessening AMI's financial impact on Source's overall bottom line.

Moreover, analysts said Burkle would have access to AMI chief executive officer David Pecker to help manage both AMI's businesses and Primedia's 70 Enthusiast titles. Though Pecker has hit plenty of rough spots running AMI, he is a well-seasoned magazine executive. "David is a great asset," said BMO Capital Market's Andy Buchholtz. "He has a lot of experience in the auto category with Hachette Filipacchi Media," of which Pecker was ceo from 1992 to 1999. As of now, Steve Parr is president of Primedia's Enthusiast Group, reporting to Source chairman Michael Duckworth.

A spokesman at Source Interlink said, "We do not comment on speculation or rumor." A spokesman for AMI did not return an e-mail request by press time.

Meanwhile, analysts are keeping their eyes on another publishing deal in the works: the sale of Dennis Publishing. Final bids are said to be due May 23. -

Time to Think (Again) About Selling Time Inc.?

"All warfare is based on deception. Hence, when able to attack, we must seem unable; when using our forces, we must seem inactive; when we are near, we must make the enemy believe we are far away; when far away, we must make him believe we are near."
Sun Tzu

Time to Think (Again) About Selling Time Inc.?
The New York Times think-about-selling-time-inc/

Time Warner may have fended off Carl Icahn's calls for a four-way breakup of the company, but that doesn't mean the media conglomerate isn't still considering some major changes. An analyst at Bear Stearns thinks a sale of Time Inc., the world's largest magazine company, is high on the list of restructuring moves under consideration.

The analyst, Spencer Wang, does not necessarily expect Time Warner to unload the business anytime soon - he actually thinks it will deal with its AOL unit first - but he suggested in a report published Wednesday that a Time-less Time Warner could eventually become reality. He described the magazine unit "the least-attractive strategic fit" with the rest of what he calls Time Warner's "video-centric" media offerings.

Slate's Daniel Gross floated the idea of a Time Inc. sale way back in August 2006. At the time, Mr. Gross argued that the magazine unit, whose readers are aging or getting picked off by the Internet, "can make eminently respectable profits for some time," but "won't provide the kind of growth demanded by public shareholders."

In the last few weeks, the media deal-making landscape has heated up. Thomson agreed Tuesday to buy Reuters for $17 billion, and News Corporation recently made a $5 billion for Dow Jones, the publisher of The Wall Street Journal.

But how to get rid of Time?

Mr. Wang sees two likely options: A leveraged spinoff, which breaks the unit off into a new, publicly traded entity, or a straight-up sale. Though a spinoff would carry less of a tax bite, a sale could be the better option, considering the price that Mr. Wang thinks the unit might fetch in the private market.

Time Inc., which, in addition to its flagship magazine, includes titles such as People and Sports Illustrated, is expected to book revenue of $5.1 billion this year, with Ebitda of about $1.1 billion. That strong cash flow, plus the relatively low amount of capital required to run a magazine business, could make it a tempting target for a private equity fund, the analyst suggested. (Others have previously suggested that Carlyle Group could be persuaded to take a look at Time if it came up for sale, seeing as Norman Pearlstine, Time's former editor in chief, is the buyout firm's senior adviser for media and entertainment acquisitions.)

How much would Time Inc. be worth? Mr. Wang estimated that a sale could bring in after-tax proceeds of between $7.6 billion and $8.9 billion for Time Warner.

Your Local News - Dateline Delhi

"A hack writer who would not have been considered a fourth rate in Europe, who tricked out a few of the old proven "sure-fire" literary skeletons with sufficient local color to intrigue the superficial and the lazy."
William Faulkner (American short-story Writer and Novelist, Nobel Prize for Literature in 1949, 1897-1962)

Your Local News - Dateline Delhi
by Barbara Ehrenreich ehrenreich/your-local-news- datelin_b_48494.html

The world may be flat, as New York Times columnist Thomas Friedman has written, but I always liked to think I was standing on a hill. Now comes the news that, a local news site, is recruiting reporters in India. The website's editor points out that he can get two Indian reporters for a mere $20,800 a year - and no, they won't be commuting from New Delhi.

Since Pasadena's city council meetings can be observed on the web, the Indian reporters will be able to cover local politics from half the planet away. And if they ever feel a need to see the potholes of Pasadena, there's always Google Earth.

Excuse me, but isn't this more or less what former New York Times reporter Jayson Blair was fired for - pretending to report from sites around the country while he was actually holed up in his Brooklyn apartment? Or will be honest enough to give its new reporters datelines in Delhi (or wherever they live)?

I should have seen it coming. In the '80s, U.S. companies began outsourcing the manufacturing of everything from garments to steel, leaving whole cities to die. Education was the recommended solution for the unemployed, because in the globalized future, Americans would be world's brains, while Mexicans and Malaysians would provide the hands. Let the low- end, repetitive jobs scatter to the ends of the earth, we were told -- the intellectual and creative work would stay right here.

So no one really complained when the back office and call center jobs migrated to India in the '90s: Who needed them? We would still be the brains of global business. When the IT jobs started drifting away, we were at first assured that only the more "routine" ones were outsourceable. As for all the laid-off techies, they were smart enough to develop new skills, right?

But no one can pretend any longer that we have a global monopoly on intellect and innovation. Look at the "telemedicine" trend, which has radiologists in India and Lebanon reading CT scans for hospitals in Altoona and Chicago. Or - and this was never supposed to happen - the growing outsourcing of R&D, with scores of companies opening labs in India or China - "Chindia," as they are known in the biz lit. In 2005, a Microsoft manager told The Financial Times that "The question is how you make [the Chinese] truly creative, truly innovative." Whoops - weren't we supposed to be the innovators?

Still, writing was believed to be safe - the last stronghold of Western creativity. Explaining the outsourcing of almost every newspaper function, including copy-editing, the billionaire CEO of a consortium of Irish newspapers wrote: ''With the exception of the magic of writing and editing news ... almost every other function, except printing, is location- indifferent." But the magic has clearly been fading, starting two years ago when Reuters started outsourcing its Wall Street coverage to Bangalore. Is there nothing an actual, on-site, American can't do better than anyone else?

In the Pasadena case, I can't even complain, as U.S.- based Reuters' workers did when their jobs were outsourced, that the quality of journalism will suffer as a result. One of the Indian reporters just hired by has a degree from the Graduate School of Journalism at U.C. Berkeley, which is one of the three or four best j-schools in the country. I have taught there myself, and know that the students are scarily smart. Too bad that they these reporters couldn't get real journalism jobs, at normal American wages, but American newspapers are axing good journalists even as I write.

No, I don't resent the Indians for moving in on the kind of work I do. I just wish the next time some managers get the idea of cost-saving through outsourcing they'd go for the CEO's job. That's where the big bucks are, and there's no reason to think a Chinese or Indian person couldn't do a CEO's work, whatever it may be, perfectly adequately, and at less than a tenth of the price. As for me, I'm retraining as a massage therapist, at least until they figure out how to do that from Mumbai.

Magazines: Change Or Die

"The charm of history and its enigmatic lesson consist in the fact that, from age to age, nothing changes and yet everything is completely different."
dude Aldous Huxley (English Novelist and Critic, 1894-1963)

Magazines: Change Or Die
BY Russell Flanner media-internet-biz- media_cz_rf_0514chinamedia.html

Beijing - A rise in the percentage of ad spending allocated to Internet and mobile media will intensify pressure on magazine publishers to adapt a fast-changing business landscape or die off, speakers at a key international publishing industry conference said in Beijing on Monday.

"The magazine industry faces more and more competition," said John Rose, a consultant with the Boston Consulting Group. Companies that don't change will "erode off into the sunset."

Rose was one of more than 1000 delegates that gathered for a three-day meeting of International Federation of Periodical Press in Beijing. China's economic growth and buoyant advertising revenues have made the country one of the bright spots for the media industry worldwide, especially ahead of next year's summer Olympics games to be held in Beijing.

Yet rather than China, much of the discussion focused on the Internet's impact on traditional publishing companies. Magazines as a group in the past several years haven't been tracking the growth in overall advertising spending, and readers have allocated less time to the magazines that they do read.

The ever-improving availability of news and content on the Internet and mobile devices has increased uncertainty about the long-term earnings outlook at once-mighty newspaper giants, and led investors to pummel their shares in the past few years. A case in point: The $4.1 billion market capitalization of Chinese outdoor advertising firm Focus Media, founded in 2003, today exceeds that of the New York Times Co., at $3.6 billion.

An especially tough challenge for traditional magazine companies is that new rivals often come from businesses that had previously not been considered as such, Rose said. Publishers in countries with relatively advanced Internet infrastructure face a relatively risky future if they don't adapt.

Still, change sweeping the media landscape will bring opportunity. IDG, one of the world's largest publishers, has seen revenues from print ads decline of late, yet 35% annual growth in Internet revenues is more than making up for the loss, said Patrick J. McGovern, the company's founder and billionaire chairman. IDG expects half of its revenues to be generated online by 2010, compared with as much as 35% today, he said in a speech.

McGovern views the Internet as a good place to try out new ideas for publications before they are launched in print because of relatively low start-up costs and the opportunity to survey readers. Besides success in introducing its U.S. titles in Chinese-language editions, the Massachusetts company has successfully invested in several Chinese firms that have gone on to list in the U.S., including Ctrip and, he said.

IDG recently repositioned itself from a more traditional publishing company to one which views itself as "Web- centric" and treats print publications and events as ancillary activities, he said. Indeed, how magazine publishers can move from a focus on a single product- -magazines--to being more brand-centered was another theme of the day.

For magazine publishers looking to adapt to the changing technology landscape, personnel are a critical factor in success or failure, Rose said. Many print magazine editors more than 40 years of age are reluctant to embrace change, and in general, magazines executives aren't so likely to think about how integrate their operations into new media, he said.

However, Steven Pleshette Murphy, CEO of Men's Health magazine publisher Rodale Inc., cited the integration of editorial management and across different distribution channels--such as print and the Internet alike--as a key factor in his own company's success.

Rose suggested that magazine publishers consider hiring executives from non-media companies to spur new thinking.

LG Philips Launches Bendable Color E- Paper

BoSacks Speaks Out: This is just a small article and a heads-up on the four color future of information distribution. E-paper is continuing to make great strides. This primitive device is just another shot in the very beginning of a soon to be vibrant industry. The technology will get better and better and the cost of manufacturing will plummet. We are not there yet, but soon, easy to read, quality e-paper will be everywhere.

"Only government can take perfectly good paper, cover it with perfectly good ink and make the combination worthless."
Milton Friedman (American Economist, b.1912)

LG Philips Launches Bendable Color E- Paper
by Matthew Broersma,
Techworld tk=nl_dnxnws

LG.Philips LCD on Sunday took the wraps off the world's first A4-sized color "e-paper" display, following up on its black and white display of the same size a year ago.

The 14.1-inch, 4,096-color display is paper-thin and flexible, and can be viewed from up to a 180-degree angle, meaning images remain crisp even when the display is twisted around, the company said.

The image is designed to be comparable to print quality, LG.Philips said. The display is less than 300 micrometers thick, and only uses power when the image changes.

E-paper is a concept designed to open up new frontiers in the world of LCD displays and to replace paper in some cases. A number of companies have debuted prototypes of such lightweight, thin, flexible displays, including Taiwan's Prime View International (PVI) and Japan's Seiko Epson.

LG.Philips' version of the technology uses a substrate that arranges Thin-Film Transistors (TFT) on metal foil rather than glass, making the display flexible and allowing it to return to its original shape after being bent. The latest display includes a color filter coated onto the plastic substrate.

The company's development process for the color display centered on overcoming processing difficulties related to the lack of heat resistance in metal foil and plastic substrates.

That meant developing processing technology that minimizes panel deformation and prevents circuit structure change during high-temperature processes, as well as research into the lamination technology and the design of the transistors and color filter, the company said.

PVI recently introduced Vizplex, an e-paper technology that, like LG.Philips' displays, uses electronic ink from E-Ink. PVI's smaller displays, between 1.9 inches and 9.7 inches, are due out this summer and are designed for mobile phones, music players, bulletin boards and electronic books.

Seiko Epson introduced a high-resolution, A6-sized e- paper display using E-Ink and a manufacturing technique called surface-free technology by laser annealing (SUFTLA).

Tuesday, May 15, 2007

BoSacks Speaks Out: "Trust but Verify"?

I'm not upset that you lied to me, I'm upset that from now on I can't believe you"
Friedrich Nietzsche (German classical Scholar, Philosopher and Critic of culture, 1844-1900.)

BoSacks Speaks Out: "Trust but Verify"?
You can draw your own conclusions here, but I say that the claims of 50 engaged readers per public copy is at the heart of some of our circulation problems. In Doctor's waiting rooms people are not relaxed. They are not lounging with carefree time. They are thinking about the Doctor, the problems, the pains that they are there to fix, some times big and some times small.

Distracted from their problems perhaps, . . . totally engaged by a magazine they found on a table . . . ?

Whatever Happened to "Trust but Verify"?
By Kristina Joukhadar prmMID=3097&prmID=1

"Trust but verify." That was the consensus at the Joint Panel of Buyers and Sellers at the annual Audit Bureau of Circulations conference last November when the category of verified circulation was officially introduced.

Yet some circulators told CM they were holding their breath, waiting for advertisers to request rebates on verified circulation. One of the main topics at a subsequent ABC panel of circulators and agency execs, chaired by media consultant and veteran journalist Karlene Lukovitz, was the value of public place circulation and how it was perceived by advertisers.

On that panel, Rebecca McPheters referred to the research her company had done in conjunction with Time Inc., which documented the fact that public place copies have 30 to 50 readers per copy-and that these are people in waiting rooms who are totally engaged with the magazine.

"Any source has a wide range in quality," McPheters said at that time, "it all depends on how engaged the readers are. Public place represents a multiple of the readers you get with subscriptions or newsstand copies. No source category is [inherently] good or bad-the ultimate value is to reach engaged readers with the demographics you want to reach."

In these previous discussions, many circulators have been concerned that advertisers and their agencies would use the verified circulation category as an excuse to knock down the value of circulation and therefore the advertising price.

Or, as one outspoken circ director said over a year ago, "It just gives advertisers another club to beat us over the head with." Based on the comments in this week's article in Advertising Age ("Marketers to Mags: Give Guarantees or We'll Walk"), this is exactly what's happening.

Robin Steinberg of MediaVest speaks in the article about the use of verified circulation, saying "we believe the proper use [of verified circ] is not taking place, and the current use is to make up for rate base under- delivery from newsstand decline."

But if newsstand sales figures can fluctuate by as much as 20 percent from issue to issue, isn't this a "catch-22"? Does it mean circulation must always be 20 percent higher than rate base in case the newsstand sales dip on a particular issue?

Who will pay for the overage? Will the advertisers pay a premium for the number of copies over rate base? Or would they prefer to wait for a six-month average, as is now the case with the ABC Audit Reports?

The reasoning behind advertiser/agency requests for issue-by-issue guarantees of circ that does not fluctuate, is said to be based on all the competition from online media, where the ad charges are based on page views and click throughs. However, as we have seen over the past few months, the measurement of the online numbers is not at all transparent.

Circulation/audience measurement and reader engagement are complex concepts to master in any medium. We believe circulators and their publishers are doing everything in their power to provide accuracy and transparency for their advertisers.

The necessary tools and metrics are just not there yet. And until they are, it is encumbent on all the parties involved to verify, yes, but verify with trust.

Loose Cannon: David Ogilvy, Soothsayer

"Does advertising corrupt editors? Yes it does, but fewer editors than you may suppose . . . the vast majority of editors are incorruptible."
David Ogilvy

Loose Cannon: David Ogilvy, Soothsayer
By Richard H. Levey

At the end of his book Ogilvy On Advertising, David Ogilvy makes 13 predictions about the future of marketing -- both direct response and non. (According to Ogilvy, he wasn't especially keen to make them, but "my publisher insists that I take a shot.")

More than 25 years have passed since Ogilvy On Advertising was first published. Now, the trick with predictions is not to put a time horizon on them -- eventually, most prognostications will come true. (If even more time passes, many will be rendered false again.)

With that in mind, here's a look at Ogilvy's Thirteen, with my 20/20 hindsight observations.

1. The quality of research will improve, and this will generate a bigger corpus of knowledge as to what works and what doesn't. Creative people will learn to exploit this knowledge, thereby improving their strike rate at the cash register.

Between the information culled through online mediums, which includes both transactional and behavioral data, and the development of more powerful computers that can analyze the data, the breadth of knowledge available to marketers is significantly wider than when Ogilvy wrote this. Additionally, psychographic and other attitudinal factors are increasingly used to differentiate prospects. 2. There will be a renaissance in print advertising.

In order for this to be true, there would have to be a renaissance in print. But both consumer magazine and newspaper readership rates have dropped considerably during the last quarter century. Online ad spending on media sites, while growing, has not made up for the loss.

3. Advertising will contain more information and less hot air.
The long-form direct mail letter is not currently in vogue. The text-heavy print ad is considered a quaint anachronism. And television commercials, according to my very random and highly unscientific sample, are more concerned with impressing viewers or clients with their own cleverness than imparting information. 4. Billboards will be abolished.
Billboards have become, if anything, more visually noisy with the light-emitting diode age. And there is a trend toward variable ads based on RFID chips in automobiles, which threatens to distract drivers from talking on their cell phones, programming their DVRs, applying their makeup, enjoying a mid-drive snack, or whatever else it is they do while giving the road ahead their attention.

5. The clutter of commercials on television and radio will be brought under control.

With the exception of children's television programming, there has been no legislative regulation on commercials within an average hour of television during the last 25 years. According to the 2001 Television Commercial Monitoring Report, networks tacked on about two-and-a-half minutes worth of commercials per hour during the 1990s. On the other hand, one of TiVo and other digital video recorders' biggest selling points has been that viewers are given -- tah dah -- control of commercial viewing.

6. There will be a vast increase in the use of advertising by governments for the purposes of advertising, particularly health advertising [the emphasis is Ogilvy's].

Ad Council and other pro bono or government- sponsored healthcare spending may not have boomed, but during the intervening years pharmaceutical firms have been allowed to advertise directly to consumers. This may not be within the letter of what Ogilvy predicted -- healthcare ads specifically sponsored by the government -- but the increase of such advertising has caused consumers to take more active roles in their health management. 7. Advertising will play a part in bringing the population explosion under control.

U.S. population in 1980: 226,542,199. U.S. population in 2000: 281,421,906. World population in 1980: 4,434,682,000. World population in 2000: 6,070,581,000. Where have the agencies been hiding the condoms? 8. Candidates for political office will stop using dishonest advertising.

The recent Tennessee Senator's campaign, which featured a race-baiting ad aimed at Harold Ford, was one of the ugliest to run since Jesse Helms's "they had to give the job to a black candidate" spot. And both of those aired after Ogilvy's book was published. 9. The quality and efficiency of advertising overseas will continue to improve -- at an accelerating rate. More foreign hares will overtake the American tortoise.

Take a look at the top winners in international advertising competitions. There sure do seem to be a lot of non-American winners. But these contests tend to reward creativity and cleverness. DM-specific American ad clients are not willing to give up their sales-focused bent in favor of entertaining prospects. 10. Several foreign agencies will open offices in the United States, and will prosper.

Actually, they had done both before Ogilvy wrote this. Dentsu has been in American since 1966, for instance. Saatchi & Saatchi, which was founded in 1976 in London, has expanded throughout the world, and is now based in New York. And that's before one considers merger and acquisition activity, which makes an absolute hash out of what is and isn't a foreign agency, and what has and hasn't "opened" in the United States. Ogilvy's warnings on the encroaching nature of foreign agencies strike me as a product of the Cold War times in which he was making his predictions. 11. Multinational manufacturers will increase their market-shares all over the non-Communist world, and will market more of their brands internationally. The advertising campaigns for these brands will emanate from the headquarters of multinational agencies, but will be adapted to respect differences in local culture.

Current emerging markets are often spoken of as being part of the "BRIC" group of countries -- Brazil, Russia, India and China. Remember also that Ogilvy made his predictions nearly a decade before the collapse of the Soviet Union. Regarding the increasing importance of international markets, Ogilvy was not only correct, but restrained. The second part of this prediction is the flipside of prediction 10: American agencies have increasingly realized the value of being not just "in language" but "in culture" as well, and have established satellite offices throughout the globe. As for the advertising campaigns being launched in headquarters and trickling down through local tributaries... smart marketers let the folks on the ground determine the plays, with headquarters' role reserved for setting general standards. 12. Direct-response advertising will cease to be a separate specialty, and will be folded into the 'general' agencies.

Ogilvy slammed it out of the ballpark on this one. There's nothing to add -- except for those who want to predict when the tail of DM will officially end up wagging the dog of general advertising. Anyone placing bets? 13. Ways will be found to produce effective television commercials at a more sensible cost.

As long as marketers allow consumers to create snack food spots on bare-bones budgets (as in the produced-by-the-public commercials that ran during the most recent Super Bowl), the costs will certainly drop. But the primary "way" that television commercials will be produced at more sensible costs will come from advertisers curtailing their budgets, and not from innovations: If agencies are given the dollars, the dollars will be spent.

Hail to the power of print

"I am easily satisfied with the very best."
Winston Churchill

Hail to the power of print
By Gavin K O'Reilly ce

Don't believe all you're being told about the death of the press: more people all over the world are reading newspapers. What's more, they're still a powerful medium for advertising, says Gavin O'Reilly

The chorus of disapproval for newspapers has become a global trend. These days it is nearly impossible to find a media analyst who actually reads a newspaper or who can see anything other than doom and gloom for the industry. I can present a different perspective.

Let's start with circulations, which continue to grow - and not just in India and China. Paid circulation grew globally by 1.9 per cent in 2006, with sales of 510.4 million copies a day. The number of paid-for titles is at a record 11,142, up 3.1 per cent on the previous year.

You can add to that the rapid growth in free dailies - titles such as thelondonpaper, 20 Minutes, Metro and the rest - which together distribute 40.8 million copies a day.

For those who think print is some relic of the past, newspapers and magazines are actually the largest advertising medium with a combined 42.3 per cent share of the market.

According to the accountants PwC, global newspaper advertising revenues increased by 4 per cent in 2006 and by 15.6 per cent over the past five years. Hidden within those figures is the fact that newspapers - the 2nd largest advertising medium after TV - are actually larger than the combined advertising value of radio, cinema, magazines and the Internet.

PwC predicts that by 2010 the global advertising market will grow by 6.2 per cent to $525bn (£265bn), a growth of $111bn (£56bn). Of that, newspapers will capture 18.2 per cent, second only to TV and the internet. Print (newspapers and magazines) will capture 27.4 per cent of that growth, greater than the internet.

According to the UK research company TGI, newspaper readership has grown by 2.1 per cent over the past five years, with readership among 15-24 year olds growing by 6.9 per cent and readers over 65 growing by 3.7 per cent. This counters the tired view that the newspaper readership is getting older with the important addendum that people are actually living longer.

The key to media exposure is the time that people spend reading, watching, using or listening to that particular medium.

Let's reflect on how US advertisers invest their clients' money. According to the specialist private equity fund Veronis Suhler Stevenson, for every hour of TV viewing, advertisers spend $40.1m (E20.2m). For each hour of radio they outlay $19.3m (E9.7m) and for the internet - all the time people are supposedly glued in front of their screens - advertisers only spend $65.4m (E33m).

As for newspapers, advertisers spend $316.3m (E160m) for every hour of reading, that's eight times more than TV and reflects the quality demographic that a newspaper delivers.

The media scene never stands still. It is important to see newspapers within the rapidly changing media matrix, where the fragmentation of society, new forms of media consumption and growing competition everywhere make life more challenging for the media buyer.

There is both the need for more credible information and more accurate demographic targeting of the consumer. Asked to name the biggest issue they face, 67 per cent of marketing directors cite fragmentation. Their task is even more difficult when one reflects on what is happening in TV land - the high altar for media planners. Aggregate TV viewership is not growing, whereas newspaper audiences have either grown or remained stable.

According to BARB, which monitors television audiences, UK TV viewing fell in the period March 2000-March 2007 by 1.2 per cent. In that period the UK terrestrial channels lost nearly 24 per cent of their audience.

There is no shortage of statistical data on circulations, readership, viewership, time spent online - and there are doubtless pluses and minuses in the detail. What is indisputable is that newspapers increasingly represent the mass-market medium channel of the future, delivering a large, broadly stable, reliable and definable demographic.

A crucial question is whether online exists as a threat or as an opportunity for newspaper publishers in 2007 and beyond.

One thing that we can all agree on is that online is a rapidly growing area in terms of usage, and most importantly, in terms of advertising. PwC forecast that global online advertising will grow by a compound 18.1 per cent to 2010 and be worth about $52bn (E26bn).

To me, among the real questions is: what is driving this online growth?

BRMB Internet Monitor in the UK estimates that 25 million Britons use the internet for emailing. Is this media consumption?

There are other inconsistencies in the data, that suggests that only 4 per cent of internet users regularly visit adult sites, even though this is a multi- billion dollar industry. Only 3 per cent say they regularly gamble online. Getting reliable data on actual internet usage rather than aggregate usage is near impossible.

Every industry needs to evolve and that's just as true for the newspaper industry as any other. Over the past 18 months we have seen more new title launches than at any time in our industry's history.

As for the investment made by publishers in new printing and production equipment, we stopped counting at $6bn (E3bn). From News Corporation's $1 bn (E500m) investment in the UK to papers across the USA, Europe and Asia, it's clearly a good time to be manufacturing printing presses. That investment is yielding more colour, more flexibility and significantly lower unit costs.

So I suggest there has been no paradigm shift.

Every newspaper publisher produces a product - a brand - that has the capacity to be relevant to and purchased by the modern day consumer. Our only risk is that industry inertia leads to consumer apathy.

Which is why publishers are investing behind their brands and businesses - and that of course includes online, which is all about aggregating a larger audience, not cannibalising our existing audience.

When you pull it all together, the prognosis for newspapers is actually quite different from conventional wisdom.

Gavin K O'Reilly is the president of the World Association of Newspapers (WAN), and is the chief operating officer of Independent News & Media plc. This is an edited version of a presentation he gave last week to an audience in London, for WAN's Capital Markets Day

Sunday, May 13, 2007

BoSacks Readers Speak Out: On Mr. Magazine, Time Inc, MPA, Editorial Integrity, and More

BoSacks Speaks Out: Mia Culpa

Friends, I have received dozens of letters and even a few phone calls from long time readers asking me about my missing vents, prognostications, and poignant punditry.

What happened to the irregularly regular BoSacks Speaks Out?

I have plenty of excuses but none of them really work.

I think the true line in the sand for me was drawn with my entry into political life. When I got elected as a town councilman, I had no idea how all consuming it could become. The previous roll models that went before me spent little or no time between meetings, preparing and working for the future of the town. So I figured I could do nothing a whole lot better than those guys, who are doing nothing.

But actually, I have taken a decidedly different approach. If you will allow me the bravado, I have taken a typical Bo-Approach to governance, and that would include speaking out, and working very hard on many town issues. Duh! What a surprise?

So how much speaking out, and in how many venues can one man achieve? I don't really know. But I have seen less speaking out in my newsletter and more speaking out in my town.

All that being said, I will do my best to return to the forefront of media venting, wherever it seems necessary, pontificating whenever possible, and prognosticating as the future unveils it's unexpected twists and turns.

PS: As an FYI - -I have completely reorganized my web site. It now has a wealth of new information and is updated daily with news items that are very important but just didn't make the cut for the daily newsletter. It also has the often asked for archive of old articles and Bo- Rants. It has updated information on everything we do for a living, and some things we don't do, including dozens of excellent media/publishing links. It is still a work in progress and I hope you enjoy it.

I have come to the conclusion that politics are too serious a matter to be left to the politicians.
Charles De Gaulle (1890 - 1970)

BoSacks Readers Speak Out: On the MPA, Editors, Integrity, Time Inc, Circ, Ads and More m

Re: BoSacks Speaks Out: GM Wants More Newspaper Advertorials
. . . my company doesn't do advertorial. Ever. I throw a screaming fit at any (potential) advertiser that even suggests it. In fact, I've been known to pillory books put out by our largest advertisers (when they deserve it.) Our readers trust us for it. Readers come first.
(Submitted by a Publisher)

Re: BoSacks Speaks Out: GM Wants More Newspaper Advertorials
hey, didn't that pcworld editor get canned for not running favorable articles? an advertorial is where you bribe the sales staff with money and free content. A p.r. placement is where you bribe them with lunch. :)
(Submitted by an Industry Consultant)

Re: If They Write It, Will They Come?
"Gannett has done more than any other newspaper company to incorporate user-generated content in its Web sites," he said, and I'm sure he's right. They're also doing it in the daily printed paper: "Hey, write to us about your experience of the Easter egg hunt." [If we can't afford journalists, we'll get the public to do the work for nothing.] And a self-respecting fish wouldn't want to be wrapped in the once world-famous Des Moines Register.
(Submitted by Writer)

Re: If They Write It, Will They Come?
You need people who can tell stories well and who understand enough about what they cover to see and convey what is most touching and interesting. Saying "give me user-generated, high-quality content" is all well and good, but just how many editors do you have to sift through all the crap that will come in? Hell, they spend tons of time sifting through what staff and freelance writers generate. This is abdication in the name of relevance that is actually an admission of incapability. People like this don't know what to do, so they come up with something that sounds good. So follow the model and you're still screwed, because you're working on the assumption that the essence of what you've done and chosen to do is right, even if the mechanism is wrong. If readers are the ones to tell the stories, then what are the papers there for? No wonder circulation is down.
(Submitted by a Writer)

Re: Editor re-instated after dispute with PC World
As one of the angry protesters in writing to PC World hoping they would realized that in sacrificing the integrity of their editor they were sacrificing the integrity of their brand and there are few faster paths to destruction I think McCracken's return is a cause to cheer for all of us who believe journalism is first about integrity. Let this lesson be both to Editors, for gods' sake have the courage to stand up for what you know is right, and for Ad executives (or Conde Nast Webisode producers) to realize that if we sell away the integrity of journalism our industry will be forever damaged . . . . and become TV.
(Submitted by a Senior Director)

Re: Editor re-instated after dispute with PC World
Wow! Integrity wins! And the supreme judge in this case was at the top of the company food chain! There IS practical value to virtue. Always has been.
(Submitted by a Senior Sales Rep - Retired)

Re: Editor re-instated after dispute with PC World
Bo, you are wrong about this one. Integrity has nothing to do with it. All this is a reaction to a strong readership out cry.
It still boils down to chasing the almighty dollar and nothing to do with management making the correct decision with any integrity.
(Submitted by a Senior editor)

Re: Editor re-instated after dispute with PC World
Great - the guy who saw the future and said that it's pandering to the advertisers is again the one in charge of online. Now wasn't it an IDG executive who noted a month or two ago that online was their future? In the long run, I'm not sure that this sounds like integrity winning over sales. It's more a case of, "Oh, how embarrassing, and in public no less."
(Submitted by a Senior Director of Mfg and Dst)

Re: Editor re-instated after dispute with PC World
Integrity is for underpaid suckers . . . and the world is filled with them.
(Submitted by a Sales Rep)

Re: NEWS FLASH * * * Elimination of Publishers Periodical Rates for Foreign Subscribers
it can't be the stupidest thing. claiming to not be a government agency while operating like one is dumber yet! Zinio and adobe must be behind this particular change :)
(Submitted by an Industry Consultant)

Re: NEWS FLASH * * * Elimination of Publishers Periodical Rates for Foreign Subscribers.
Unfortunately this is not new news but seems to have been over looked by many. Many printers will not offer ISAL, so re-mailers or first class international may be the only options. The postal service is also eliminating air and surface letter post.

You cannot mail Periodicals foreign and Canadian mail after 12:01 AM May 14.
You must make other arrangements for this mail.
(Submitted by a Postal Director)

Re: Newsweek Editor: 'Dead Tree' Magazines Will Continue
Bob: As a former Newsweeker, I feel Meacham is correct; there will always be a future and a place for good, timely, relevant writing. Newsweeklies have the advantage of pictures and graphics to support their editorial, but the writer still needs to follow the NPR maxim: 'Can you see what I'm saying?'

4,000 words is about 3,700 more than I care to read from a computer screen. There are some ideas that cannot be sufficiently concentrated and packaged onto one page. The answer is simple. Print the article and read it at your leisure. I guess that is why people continue to buy print.
(Submitted by a Print Salesperson)

RE: Newsweek Editor: 'Dead Tree' Magazines Will Continue
Prediction 1: "Green" magazines and catalogs will not be printed on recycled, de-inked, or FSC certified paper. They just won't be printed at all.

Prediction 2: Before the end of 2007, the "disposable celebrity" bubble is going to burst. This category is soley responsible for the strength of the newsstand performance. I spend about $50 on the newsstand every month, and before I discovered the guilty pleasure of various "celebretard" websites, there was always a representative mix of this category in my briefcase. I haven't purchased one issue of a Bauer weekly in months. I'm actually spending more on magazines than before, but my purchases are in completely different categories.

I work with the paper industry and have (for the past 10 years) been trying to help my clients find ways to make print relevant. I NEED your service. You do a fantastic job.
(Submitted by a Paper Person)

Re: Why "Mr. Magazine" canceled his Newsweek subscription
I never thought I'd say this (I haven't always been a fan of Mr. Magazine) but this article is right on. In my market, at least, there are NO online competitors that actually make money. (The largest websites in our market are strictly not-for-profit and carry no advertising whatsoever.) Our readers are our customers, not our advertisers. We should do what our readers want, and the advertisers will follow.
(Submitted by a Publisher)

Re: Why "Mr. Magazine" canceled his Newsweek subscription
It's the number one reason our industry is in freefall. ALL our problems -- lack of interest in our products, newsstand sellthrough decline, phantom circulation (or just plain circ fraud) which leads to lack of trust by advertisers in our product -- all of these stem from one primary failure:
not serving our readers first.
I've been in this industry for over a decade, and it still amazes me to see how people in this business abuse their customers. None of my titles exceeds 25% advertising (I sell out an issue and say "try next time" if we are about to exceed 25%) . We screen our advertisers heavily (for example requiring written references for personal/professional services like psychic readers -- common in our market.) We mail in envelopes to protect reader privacy. We never, ever sell or rent our list. And our readers have responded by incredible loyalty and support. People will respect you if you respect them.

More and more, I see "industry experts" in Folio and elsewhere recommending the policies we have thought were purely common decency (as above) and have followed for years. Hopefully, it's not too late to save our industry. Thanks for a wealth of great information,
(Submitted by a Publisher)

Re: Why "Mr. Magazine" canceled his Newsweek subscription
As a former client, I can vouch for the fact that Samir is really the most knowledgeable magazine guy in the world!!!!!!
(Submitted by a Publisher)

Re: Why "Mr. Magazine" canceled his Newsweek subscription
Bo, I think you and Samir are the two brightest light bulbs in the industry. I've had many a conversation with fellow publishers about you. We all agree, that you bring needed fresh air into some very stagnant smoke filled rooms. The MPA, ABC, BPA and all the others, need your criticisms and your approach to our problems. Please keep up the good work and the continued pressure you apply by speaking out.
(Submitted by a Senior Publisher)

Digging Murdoch

"I must say that I do wrestle with the amount of money I make, but at the end of the day what am I gonna say? I took less money so Rupert Murdoch could have more?"
Tom Hanks (American Actor and Producer, b.1956)

Digging Murdoch
By William Powers,
National Journal

It's been funny watching media people try to wrap their minds around the idea that Rupert Murdoch may be the next owner of Dow Jones and its most famous asset, The Wall Street Journal. Not funny ha-ha, but funny as in tragicomic, as in every laugh is also a sob.

The biggest howler is the idea that Dow Jones -- and The Journal in particular -- desperately need Murdoch, without whom they can't possibly survive in the big, bad world of 21st-century media. The basic argument is that traditional newspaper publishers, and the journalists who work for them, just don't grasp what it takes to thrive in the new marketplace of information. Murdoch, meanwhile, is a bold, creative genius who utterly "gets it." The man bought MySpace, for God's sake, and his empire is all about "synergy." Now he can use MySpace to promote X-Men. Maybe The Journal could do that, too!

Please, Mr. Murdoch, sprinkle some of your synergistic billionaire fairy dust, teach us to be citizens of the modern world.

This argument has been propagated all over the place in the last week, mostly by business writers who do a kind of two-step on the big Murdoch question: 1) concede that his journalism record isn't all that great, and actually, it's often pretty darned schlocky; then 2) genuflect and sing hosannas to the man's amazing market savvy. Which is to say: He pulls in large cash -- and that makes everything OK.

Thus Andrew Ross Sorkin, writing on the front page of The New York Times Sunday business section, says he personally is no regular viewer of Fox News, and yes, Murdoch comes from the journalistic "tradition" of sensationalism. But "Mr. Murdoch is also part of another tradition: farsighted, creative, and risky business gambits. He has made piles of money by thinking ahead of many of his competitors." The Dow Jones empire, Sorkin contends, "once held a dominant position in business journalism, and they let that lead, and the financial gains that came with it, slip through their hands."

No question that Dow Jones has had a lousy business record over the past few decades. The mistakes and missed opportunities are notorious. But if The Wall Street Journal doesn't hold the "dominant position in business journalism," who does? Isn't that exactly why Murdoch is willing to pay such a premium to get his hands on it? One of the miracles of The Journal has been how consistently excellent it remained -- brave, principled, beautifully written and edited -- despite frequently daft corporate oversight. In short, it has been a mediocre business but a terrific news outlet. It does not follow that the best way to fix this imbalance is to reverse it, by selling one of the world's great newspapers to a man who, in order to keep making his piles, is almost certain to undermine many of the things that made the paper great in the first place. But that's what they're saying.

"No one sensible, and surely not I, would ever claim that Murdoch hasn't exhibited a pronounced tendency toward the down-market," writes John Heilemann in New York magazine. And: "God knows Murdoch's politics aren't my brand of vodka. But you have to admire the way he's been an unrelenting force for change and modernization in the media racket, the way he's shaped and adapted to epic transformations of platforms and technologies."

Do we really have to admire that? When you hear anyone in the media talking about "platforms," check your wallet. This is the language of business hipsterism, a code designed to make you feel lost and out of it. If you don't get Murdoch's "epic transformations," and his brilliance, you're stuck in the past, man.

In a cover-story Valentine to Murdoch, BusinessWeek waxes rhapsodic about the magical things that "Roop" might do with his prize. He might "launch Journal- branded TV programs," or use various Dow Jones properties to "tailor financial information for investors." Hooray. "What's more, Dow Jones' higher-end readership could be exploited by a recent acquisition made by Fox Interactive Media, a behavioral tracking firm that helps point advertisers to certain groups with particular habits and tastes."

Some day, if we're really lucky, maybe we'll all get to be exploited by Murdoch. Oh happy day.

-- William Powers is a columnist for National Journal magazine, where "Off Message" appears.

All-out outsourcing

Keep five yards from a carriage, ten yards from a horse, and a hundred yards from an elephant; but the distance one should keep from a wicked man cannot be measured.
Indian Proverb

All-out outsourcing by Alan Mutter

Struggling to sustain their traditional profitability amid weakening sales, newspaper publishers are looking to outsource everything from composing ads and printing papers to producing content and answering the phones.

After nipping and tucking headcount in newsrooms over the last few years, publishers appear to be poised to eliminate a significantly greater number of jobs in their plants by focusing on areas that previously were immune to cutbacks.

The initiative likely to claim the largest number of positions in the near future is the outsourcing of advertising composition to places like India and other low-wage countries.

In light of the apparent success of a pilot ad-outsource program at the Media News Group properties in Northern California, publishers like Gannett, McClatchy, the New York Times Co. and Scripps are considering whether they, too, should export such duties to offshore vendors, according to insiders familiar with the discussions.

These talks may or may not result in a decision to outsource jobs at any given property. But, human costs aside, the economics are powerfully persuasive.

Newspapers sending ad production offshore typically can reduce payroll costs by some 45%, says Robert Berkeley, president of Express KCS, one of the outsourcing companies. Thus, a paper could cut its costs to $30,000 a year per outsourced worker from $55,000 for an American doing the same job. These savings are even higher in unionized metro environments, where papers are struggling the hardest to sustain their margins.

The Columbus (OH) Dispatch was among the first to shift ad production to India, eliminating 90 jobs from a paper with daily circulation of 231,355. Assuming savings of $25k per employee, the paper should be able to add roughly $2.25 million a year to its bottom line.

Putting it another way: If a paper paid each departing employee a generous half-year of severance, the outsourcing project would begin to pay for itself in little more than 12 months - a terrific return on investment.

In what may be a harbinger of future initiatives elsewhere in the country, the San Francisco Chronicle has signed a 15-year contract with a Canadian company to begin printing the paper in in a new plant being constructed by early 2009. The opening coincides with the termination of the contract covering the newspaper's 230 unionized press operators. When the new plant opens, their jobs will be gone.

While not outsourcing their production altogether, companies like the New York Times, Gannett, Media News and Journal Register have consolidated the printing and mailroom operations among certain of their geographically contiguous properties. In New Jersey, 200 production positions were eliminated when Advance Publications opened a plant to combine the production of the Newark Star Ledger and the Trenton Times.

While outsourcing production is complicated and not always feasible, the easiest jobs to shift are those of the people who work in telephone rooms or perform accounting, billing, accounts payable, human resources and other clerical functions.

Many newspaper groups already funnel want-ad and circulation calls to regional or national centers, where a single group of workers serving multiple time zones is far more efficient than a team dedicated to a single market. Many chains also have either consolidated clerical functions at in-house service bureaus or outsourced them to domestic vendors.

Sending call-center and clerical work offshore can shave 25% to 30% off the present costs of such operations, according to Gartner Research, a private firm. The New York Times and Boston Globe, among others, are each sending 40 to 50 clerical jobs to offshore contactors.

Even editorial and online operations are not immune from outsourcing.

Knight Ridder had a plan to create regional copy desks to handle headlines and layouts for groups of newspapers, a concept that was shelved prior to the sale of the company last year. Preposterous as the idea might sound, this is exactly what is being implemented in New Zealand by the publisher of the country's largest daily and several other publications.

APN News and Media, a division of Britain's Independent News & Media, is outsourcing about 70 jobs to an Australian company, according to Deutsche Presse-Agentur. If it works well, Independent News may extend the program to its titles in England and Ireland.

Reuters has more than 300 journalists in India writing many of the routine stories on its financial wires, according to MediaGuardian. Reuters has said it may increase the size of the Indian staff to 1,500 writers, though this could be affected by the potential merger with Thomson Corp.

And today's Los Angeles Times reports that a hyper- local website in Pasadena (not affiliated with a newspaper) has hired two writers in India, who, among other things, will cover city council meetings via webcam.

As valuable as Internet operations are to the future of newspaper companies, some publishers are having at least a portion of the work done overseas. London's Financial Times, for example, relies on a staff in the Philippines to help edit and maintain its web site.

With offshore development, testing, hosting and technical support common in the information- technology sector, it is only logical that newspapers could achieve additional economies by moving - or expanding - many of these functions abroad.

When everything from designing buildings to analyzing X-rays can be performed by lower-paid professionals in another part of the world, there's no reason to believe newspapers can avoid the workforce shake-ups that have jolted most other industries.

Institutional inertia and economic self-satisfaction have maintained the status quo until now. As an increasingly challenging business environment forces newspapers out of their comfort zones, many dedicated workers, unfortunately, will be forced out of theirs, too.