Reader's Digest to Chop Rate Base by 20%

Reader's Digest to Chop Rate Base by 20%
New Management Finds 8 Million More Cost Efficient

By Nat Ives

Published: June 28, 2007 NEW YORK (AdAge.com) -- The new management at Reader's Digest has decided to cut the magazine's guaranteed paid circulation by 20%, to 8 million copies per issue from 10 million. The move takes effect with the January 2008 issue.
Rate-base reductions, like the one Reader's digest announced, used to function as distress signals for magazines, bit no longer. "As the new team, one of the first things we did was analyze the circulation status," said Eva Dillon, president of the RD Inspiration division and group publisher of Reader's Digest. "We quickly came to the conclusion that while we are delivering our rate base effectively, it makes more sense from a profitability and value proposition to adjust." No longer a distress signalRate-base reductions used to function as distress signals for magazines. Back when Publishers Clearing House delivered a steady flow of subscribers, nobody looked into circulation quality very carefully and reader engagement wasn't a priority. But the last couple of years have seen a reversal of that situation, partly because unscrupulous subscription agents and fraudulent publisher's reports drew the whole area under new scrutiny.

Rising postage and paper costs that make direct-mail subscription solicitations increasingly expensive have also played a big role. "It makes sense for us because it's cost efficient and it makes sense for advertisers because it's more relevant and loyal readers," Ms. Dillon said. Now media buyers tend to view rate-base cuts, especially if they are done from a perceived position of strength, as a means toward more loyal readership and better-engaged audiences. Paid-circulation cuts have come recently from magazines as diverse as Time, Woman's Day, TV Guide, Playboy and BusinessWeek.

Even celebrity weekly Star has a cut planned; on July 1 it will become the first of its peer group to reduce paid circulation by 10%. The Reader's Digest Association, which publishes Reader's Digest along with Every Day with Rachael Ray and other titles, went private last March in a $2.8 billion deal that installed Mary Berner as president-CEO. The new leadership has already scaled back a planned rate-base increase for Rachael Ray.

On the Record: They Aren't Just Like Us

"There is a tide in the affairs of men, Which taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat. And we must take the current when it serves, or lose our ventures."
William Shakespeare




On the Record: They Aren't Just Like Us
by Mike Bloxham
http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=61095&Nid=31735&p=204904

The very fact you are reading this article and this magazine is evidence that you are - in the nicest possible way - a freak of nature. That is not to impugn either you or the goodly publishers of Media magazine or my fellow contributors (all of whom are worthy, wonderful and intelligent people).

Rather, it is a fact based on the sheer amount of time we spend contemplating and working in the world of media in all its forms (and for those of you bridling at the very notion of being a freak for reading this, console yourselves with the contemplation of what that makes me, the author of this piece). In short, this single-mindedness makes us so unlike the people we dedicate ourselves to reaching, moving, engaging, motivating, persuading and influencing that we are - in comparison - decidedly abnormal (freakish).

Consider for example, your average work day (probably at least eight hours and generally more). For all of that time you will be rigorously focused on planning, executing and evaluating campaigns. You'll be buying or selling media. You'll be pitching new business or being on the receiving end of pitches. The list goes on, and all the while you will be dipping in and out of the stream of online articles dropping into your inbox to inform your ever-evolving perspective of the fast-moving media landscape and all that takes place within it.

Your Media Day is very much made up of the business of media itself (as well as whatever content you consume via your channels of choice). For your consumers, however, the Media Day almost certainly involves a great deal of media, but they are all about content, not the business end of things. They care more about last night's ball game, the reality show of choice and the day's morning news. They also care about their kids' education, their prospects at work, their retirement and what the family holiday will be this year.

In short, they don't really care about media itself - just what it does for them. We, on the other hand, care a lot. And that's how it should be. It's the willingness to focus so much effort and time on the business of media that makes you good at what you do. The catch, though, is that it also helps to create a divide between practitioners and consumers that can be almost impossible to bridge.

Too often one hears statements from the media community that suggest an implicit belief that consumers are "just like us" - as well-informed and equally motivated to engage with media as those of us that are paid to. How many times have you heard that "everyone" is using a Blackberry incessantly, watching videos on their iPods, blogging, spending half their lives in virtual worlds, etc? If these kind of statements had been true, then the on-demand world would already be all-encompassing, every household would have a DVR, TV would be interactive from top to bottom and most retail outlets would have become a thing of the past.

Those with a vested interest in these things happening want to find evidence for them doing so. But we have to avoid the mass delusion of the dot-com bubble. As so many more platforms and capabilities emerge and reach a potential audience, we must strive to avoid falling into the trap of believing that the simple fact of availability will lead to inevitable and habitual large-scale use.

A case in point is the video-capable iPod. In a story in this magazine a few months ago, various commentators expressed surprise that a piece of Nielsen research found only 2 percent of a sample of 400 iPod users watched video on their device. Doubt was cast on the methodology, partly because the number of video downloads from iTunes would logically indicate iPod-based viewing. But consumers are inconvenient in their habits and as research will show, many of the movies downloaded from iTunes never make it off the pc or Mac, where they are viewed without the need for a further file transfer. To many users, this is a convenient route to what they want (the movie), while the iPod still performs perfectly well as an audio device.

Though there's unprecedented change happening in the media world now, it's not all happening at the same rate. While new devices and capabilities seem to come through almost every week and companies rush to commercialize, consumers don't always follow at the desired pace. Sometimes they even adopt unexpected patterns of use that leave companies playing catch-up. It's our ability to empathize with consumers that will enable us to turn expertise to practical advantage rather than be bogged down by our own perceptions.

Mike Bloxham is director of insight and research at the Center for Media Design, Ball State University. (mbloxham@bsu.edu)

There Are More Magazines Than You Think

BoSacks Speaks Out: I have a hard and fast "rule" not to send out press releases in my newsletter. But every rule needs to be a bit flexible and in this case I am breaking my own rule.

The PR below is filled with interesting data. I cannot at this time substantiate any of it. But I have stated for years that the MPA and its peculiar and narrow set of statistics does not represent the magazine industry as a whole, but rather an elite fraternity with a particular self-serving agenda.

The conclusions of this PR needs to taken with a grain or two of salt, but I bet you dollars to donuts that these and Samir's numbers are closer to reality than anything the MPA has to offer.


"You can use all the quantitative data you can get, but you still have to distrust it and use your own intelligence and judgment."
Alvin Toffler quotes (American Author of Science-fiction, b.1928)



There Are More Magazines Than You Think
http://www.primir.org/

There are more magazines and more new titles appearing each year than most reports indicate, including those emanating from the Magazine Publishers of America and Samir Husni, Mr. Magazine, according to the results of a recently completed study of "Magazine Printing & Publishing in North America" by PRIMIR, the Print Industries Market Information and Research Organization.

MPA focuses only on the "big dogs" and Mr. Magazine does not delve into the business-to-business, custom and educational titles, says William C. Lamparter, President of the PrintCom consulting Group that conducted the study for PRIMIR.The study identified a total of 26,140 titles of all types and frequencies published in North America during 2006. Of this total 16,050 were U.S. consumer magazines and 7,270 were classified as U.S. business magazines. All of these titles were published on a regular frequency for at least a year or in the case of annuals, had published their second edition.

This is the largest and most inclusive number of titles ever specifically identified and demonstrates the breadth, depth, and health of the magazine industry, Lamparter said.During 2006, 1,200 new consumer titles were born in the U.S. including 900 consumer titles identified by Dr. Husni, who was a member of the PRIMIR/PrintCom magazine research study team, as well as 300 titles in the consumer educational, affinity and custom publishing segments. Of the new consumer titles, almost two-thirds are annuals including annual specials, while almost a third are issued four or more times a year.

Fifty-five new business magazine titles were added in the U.S. to bring the 2006 U.S. new title count to 1,255, according to the PRIMIR study. One hundred and ten new consumer titles and five business titles were added in Canada during 2006. These all inclusive new title counts point a more accurate picture of the health of the magazine business than the more limited view of consumer only, opined Lamparter.By 2011, the study forecasts that the number of titles of all types will continue to grow to over 25,000 in the U.S. and 3,000 in Canada for a total number of North American titles of over 28,000.

However, the study forecasts a 10% decline in total pages included in all North American magazines by 2011. The forecast is for titles up - page count down.

U.S. Ad Spending Loses Steam, Shifts Into Emerging, Unclassified Media

If you torture data long enough, it will tell you anything you want !"
Unknown


U.S. Ad Spending Loses Steam, Shifts Into Emerging, Unclassified Media
by Joe Mandese


http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=63089&Nid=31775&p=204904

U.S. AD SPENDING NOW IS projected to grow only 3.1% in 2007, according to revised estimates released Tuesday by industry forecaster Bob Coen. That's a significant downward revision from the 4.8% the Universal McCann director of forecasting originally projected in December, and means the ad industry will once again fail to keep pace with overall U.S. economic growth. The downgrade is the latest in a series of downward revisions issued by other leading industry forecasters and suggests that some fundamental shifts are taking place in the industry's economics, as advertisers continue to shift money out of traditional media and into new and emerging media platforms, especially online. The fastest growing of the major media tracked by Coen - and the only one projected to rise at double-digit rates - is the Internet, which he predicts will rise 15% to $10.715 billion in 2007. That's about three times the 5.9% rate of growth of the overall national media marketplace, and it doesn't even factor in some of the fastest growing areas of online advertising, including search, social networks and online video.

Those and other emerging platforms - such as mobile marketing, video games, advanced television, and digital out-of-home networks - will actually grow at double the official online rate, rising 31.7% in 2007, according to a companion forecast presented Tuesday by Brian Wieser, senior vice president-director of industry analysis at Universal's sister agency Magna Global.

The side-by-side forecast presentations were a symbolic counterpoint, with Coen representing the old world of the advertising economy and Wieser the new one, which some believe may be responsible for sucking some of the wind out of traditional advertising spending.

Asked what the real growth rate would be for the overall advertising economy if the emerging platforms were factored into the total equation, Coen said it could add as much as a half a percentage point to the industry's growth. "Instead of that figure being 3.1% it might be 3.5% or 3.6%," he said.

But the changes taking place in advertising spending aren't simply a shift from old media to new, said Magna's Wieser, but an even more fundamental redeployment.

"What's actually happening, I would argue, is advertisers are shifting their money out of media that we define as ad-supported media into marketing," said Wieser, adding, "And it's very difficult to measure that."

Some of that spending is going into so-called "below-the-line" marketing services like direct response and promotion that aren't classified as advertising budgets, while others are going into new media platforms that have yet to be classified.

Coen, who has been a fierce champion of the classic definition of advertising, acknowledged Tuesday that it might be time to redefine its meaning to encompass new media and new methods of marketing communications.

In fact, Wieser noted that many of the fastest growing of the emerging platforms still haven't figured out how to "monetize" their reach in terms of advertising revenues. For example, he estimated that for all their growth, online social networks would take in only about $685 million in advertising revenues this year. While that's up a whopping 148% from the $276 million advertisers spent on social networks in 2006, it's still only a fraction of their relative growth in terms of share of total Internet page views. Wieser estimated that the page views of social networks would rise nearly 99% this year vs. only 2.6% for total Internet page views.

He also predicted that social media ad spending would top $1 billion next year, rising 48.9% over 2007.

Similarly, online video is growing rapidly, but still is a relatively small share of total ad spending. With an estimated $365.5 million in ad sales during 2007, online video will grow 55.5% over 2006, but will still account for less than 1% of the total TV advertising marketplace. Wieser projected that online video advertising would 53.2% to $560 million in 2008.

While still small in the context of the total advertising marketplace, these emerging media nonetheless will continue to outpace the overall advertising economy by a wide margin. According to his first estimates for 2008, Coen expects U.S. ad spending to rise only 5.0% to $305 billion in 2008.

Sales slide quickens at newspapers

"To get anywhere, or even live a long time, a man has to guess, and guess right, over and over again, without enough data for a logical answer."
Robert Heinlein (American science-fiction writer,1907-1988)



Sales slide quickens at newspapers
The queasy plunge in newspaper advertising sales in May suggests the revenue deterioration that began in the middle of last year is accelerating at a dangerously increasing rate.

If the decay continues quickening at an unchecked pace, it is difficult to imagine how some newspapers, particularly the marginally profitable ones, can continue to exist indefinitely as we know them.

May was the worst month - so far - in what is shaping up to be a dismal year for newspaper ad sales.

The year-to-year sales declines of the publicly traded publishers last month were 14.9% for Media General, 11.8% for Tribune Co., 11.5% for Journal Register Co., 11.5% for McClatchy, 9.9% for New York Times Co., 6.8% for Journal Communications, 6.8% for Gannett, 5.7% for the Ottaway division of Dow Jones and 1.7% for Lee. The table below shows the same-store, print and online ad sales of the respective publishers since the beginning of the year.

These declines are hardly blips related to weather, the date of Easter or any of the other reasons that publishers invoke when trying to position their sales shortfalls as isolated, aberrant events.

They are part of a steady deterioration that began in the second half of 2006 and has accelerated ever since. Advertising sales (including print and new media) fell 1.5% in the third quarter of last year, 2.2% in the fourth quarter of last year and 4.8% in the first quarter of this year, according to the Newspaper Association of America.

In the first five months of this year, none of the publicly held newspaper companies reported positive sales performance, except for Gannett's meager gain of 0.3% in January. The newspaper ad declines came during a period that over-all retail sales grew comfortably in the United States, as illustrated in the graph below.

Some public companies, like Dow Jones, tend to obfuscate monthly sales reports, so it might have had higher year-to-year sales in January; I can't tell. Others, like Gatehouse, don't report monthly revenues, which they are not required to do. Still others, like Belo, have stopped discussing monthly sales, saying "a single month's revenue performance is not a reliable indicator of quarterly advertising trends."

With sales and, therefore profits, falling at seemingly accelerating rates, some newspapers, particularly metros, appear to have entered a period of exponential decay that eventually could impair the viability of their existing business models.

In that event, papers will have to eliminate things like television guides, book sections, op-ed pages or Sunday magazines - which some already have done. Or, they will quit publishing seven days a week, skipping perhaps such ad-weak days as Monday. Or, they will stop printing papers and move to strictly digital publishing formats. Or, they will stop publishing altogether.

Because many internally controllable and externally uncontrollable variables affect the sales, expenses and profitability of an enterprise as complex as a newspaper company, it is not possible to say when a given newspaper might pass the point of no return. But the accumulating evidence suggests that some are getting closer.

For starters, as discussed in this previous post, the print revenues that generate more than 90% of the sales of most newspapers may be $2 billion lower this year than they were in 2006. Coming at a time of general economic well being, the collapse, if it materializes, would establish beyond question that the industry has lost its once-magical ability to achieve consistent sales growth in both good times and bad.

You need look no further than recent news reports to see how the industry's deteriorating resilience is affecting the delicate economics of such highly leveraged ventures as the Minneapolis Star-Tribune, Tribune Co. and Philadelphia Media Holdings, which each have been loaded with debt to finance the recent changes in their ownership. They are, in short, the canaries in the coalmine.

Barely three months after the Minneapolis Star-Tribune was sold in February, its operating profits were 20% lower than what had been projected by the investors who acquired the paper from McClatchy. If the newspaper - which already has reduced its staff by 145 people, or 7% - can't find a way to improve its sales, it would have to cut still more expenses to avoid default on its loans.

Tribune Co. has been forced to agree to pay tens of millions of dollars a year in additional interest, because lenders are nervous about the company's ability to generate sufficient profits to pay the interest on the $13.4 billion in debt it is borrowing to go private. "Tribune, which last year generated cash flow of $1.3 billion, will initially have to meet annual interest costs of around $1 billion when the buyout is complete," reports the Wall Street Journal. If Tribune's sales fall short of expectations, the only way to service the debt will be by cutting expenses or selling assets - or both.

Only months after Philadelphia Media Holdings bought the Inquirer and Daily News, the Inky reported last year that the papers would have barely "$10 million" left in 2006 after paying interest of $40 million on the money borrowed to finance the transaction. The paper's profits, noted the Inky, had fallen from $100 million in 2004 to $76 million in 2005 to roughly $50 million in 2006. There's not much margin for error in this deal. A spokesman for PMH did not respond to requests today for an update on the company's financial health.

While everyone in the newspaper business acknowledges that the good old days are gone, few people viscerally understand how rapidly the industry is coming to the point that it cannot sustain itself without farther-reaching - and likley more wrenching - structural changes than such relatively modest efforts to date as scrapping stock tables, outsourcing telephone ad-takers or even down-sizing newsrooms by 50%.

Absent plans to pare entrenched bureaucracy, eliminate archaic work rules and speedily implement bold strategic initiatives to build significant and sustainable new revenue streams, the industry could find itself on a hopelessly irreversible trajectory. If it isn't there already.

BoSacks Readers Speak Out: Time, USPS, Reiman and Circ

"If you could say it in words there would be no reason to paint."
Edward Hopper (American Painter who strongly influenced the Pop art and New Realist painters of the 1960s and 1970s. 1882-1967)


BoSacks Readers Speak Out: Time, USPS, Reiman and Circ
www.bosacks.com


RE: Buyers Still Choose Time's Circ Over Audience
The statement that "newsweeklies face a tough ad environment" is interesting, given that The Economist and The Nation have substantial growth in ad pages so far this year and that U.S. News is also up. I guess Lucia Moses is defining "newsweekly" as Time and Newsweek -- wrong definition, and wrong diagnosis. The problem is not newsweeklies but rather mass media. Niches are thriving; mass media are dying.
(Submitted by a Paper Person)

RE: BoSacks Readers Speak Out: On Magazines now and Later
Just read about the WallSt Journal and USA TODAY providing a Free Magazine for their Weekend Editions, similar to the New York Times. What is most interesting here is that the Google model of free content and a cheap efficient distribution system is working to HELP newspapers by providing the magazine and its contents FREE, Will the day come when daily newspapers in the major cities give away the paper as contents and rely on Advertising for Revenue.. Isn't that the true competition for the WEB???
(Submitted by a Publisher)


Re: Meredith's Griffin Describes Whirlwind of Change, Both for Industry and for Company
Griffin has his act put together. Hope everyone in the audience was listening and hearing, except those folks East of the Hudson, who probably think Griffin represents a company from the 'OUTBACK'.
(Submitted by a Paper Person)



Re: No Reprieve on Postal Rate Hike
Hi Bob: Wow. What does the mailing industry do when faced with monopolistic decisions made by a small handful of unelected officials who scoff at the laws of supply and demand, and scoff at the industries who depend on the postal monopoly as a lifeline to their customers?

This, without a doubt, was one of the worst rate cases in postal history. Even USPS, while trying to mitigate catalog increases, bought into the malarky being peddled by the big publishers, who for years have been trying to strike a death blow to smaller publishers and remove the hated "fragmentation" of the periodical industry so loathed by Time Inc.

If Time Inc could succeed in killing 50% of the periodical industry, they would be partying in the halls, lighting their cigars with $100 bills, and offering free makeovers to all employees. But, does the USPS exist to function as a tool of Time Inc and big publishers?

Why are weird things happening? One big reason is the near complete and total abandonment of efforts find viable means and methods of alternate delivery. What do you do when faced with a monopoly? You do everything in your power to inject competition, real competition, into the marketplace. A monopoly, unchecked, will ultimately render the kind of decisions imbedded in this ugly rate case. If this case is not a wake up call to the mailing industries, what then will it take? The mailing industries need to suspend their "zero-sum" battles, and find a common ground. That common ground should be the long, slow, painful, and costly march to building viable alternative delivery systems that can provide a break on USPS rate increases.

The only shorter term relief here may be in the response to the inevitable failure of these rates. If the response is to reduce rates, there might be some relief, but it would be at least 1-2 years away. Even if it comes, it would be a mistake to continue the policy of

ignoring the need for viable alternative delivery systems as the best way to battle USPS and its quirky rate making bodies, the PRC and BOG.
(Submitted by a publishing expert at a major university)


Re: BoSacks Readers Speak Out: On Magazines now and Later
Bo, Latest on Reiman happened last week but announced on Tuesday. The name is being dropped off the door, Newton got fired, who has run the show for the last three years. RDA is not really RDA anymore because it is owned by Ripplewood. The name that is going on the door is RDA Milwaukee. Quote of the day came out of some guy in the announcement to the press, "Reiman is not the brand, the titles are", What rock has this guy been hiding under?"

The next thing, it has been also told to the Reiman folks that they will begin selling advertising in their publications. This will be the beginning of the end as their subscribers will bail at renewal time. Taste Of Home is already on a downward trend after peaking at about 5.4 million just before Readers Digest purchased Reiman for $750 million. The biggest problem that faces these decision makers is many subscribers they have are multiple in nature and receive several titles. whoops.
(Submitted by a Paper Person)


RE: 'Time' Shoving Its Reluctant Writers Online
I'm curious . . . were the editorial obligations for print adjusted to allow for the additional time needed to produce unique pieces on the web? In this day and age, I'd think not. No wonder some of the writers are reluctant to increase their workload for no additional compensation. Is it the usual, "you're lucky to still have a job" spiel from management?
(Submitted by an Editor)


RE: Biggest Threat to Newspapers Is ... MySpace?
Bob; Maybe it's just having been on vacation and out of touch for ten days, but your recent articles (Time editors, Time.com, Time Circ, Yahoo, Paper pricing, and MySpace, among others) ALL seem to be particularly relevant to the industry's current plight (not current "situation"). The changes are coming at warp speed. The good news is that for anybody not paying attention, the end will be mercifully quick.
(Submitted by a Senior Director of Manufacturing and Dst)


RE:
What a jackass. You lose more credibility every day.
(Submitted by a Director of Operations)
((Written in regards to Bush Quotations which were incorrectly attributed by Bo))
http://www.snopes.com/quotes/bush.htm

RE: paper Companies
Nobody likes to hear about threats to their business model; if it worked in the past, and it has, it should work in the future. This attitude is also very prevalent at XXX. . . . Unfortunately things change. Just ask the people at Polaroid. I still like to read the printed word on paper, but I am an old geezer. I just don't like bending over a computer terminal since I may have been on it all day. With my old eyes, I like the small columns of printed articles in newspapers and magazines and not the written story the width of the computer screen. For me it is simply easier to follow. But my kids seldom read a newspaper or look at a magazine. I guess I never knew in the old days when I was calling on you, I was going to be the company of a star.

(Submitted by an old friend and former paper sales person to BoSacks)

Is YouTube, Supposed King of Online Video, Doomed to AOL's Fate?

"I like the dreams of the future better than the history of the past."
Thomas Jefferson (American 3rd US President (1801-09). Author of the Declaration of Independence. 1762-1826)


Is YouTube, Supposed King of Online Video, Doomed to AOL's Fate?
Aggregator on Fast Track to Irrelevance as Media Bigs, Marketers Realize They Can Serve Content on Their Own
By Simon Dumenco
http://adage.com/columns/article?article_id=118688
Once upon a time there was a huge, rapidly growing new-media company that consumers really seemed to love, that made competitors sweat and that just about everybody seeking to prosper online figured they had to do business with. Its shtick was that it had the common touch -- that it gave consumers exactly what they wanted and made the online experience effortless, thanks to its unprecedented ease of use.

YouTube dudes: Are Chen (l.) and Hurley the next Steve Case?
Photo Credit: Gabriela Hasbun


Lots of old-media companies, awed by this company's seeming invincibility and its apparent lock on the mass online audience, signed hugely disadvantageous deals, essentially giving away their content in exchange for the exposure. Marketers in particular groveled, lining up to throw money at the company.

The company I'm talking about is, of course, America Online.

And pathetically, or hilariously -- depending on your perspective -- we're now reliving the (unlearned) lessons of AOL with another company that has seemed, until very recently, like the unavoidable 800-pound gorilla of the viral-video space: YouTube.

I'll just go ahead and say it: YouTube is the new AOL -- in all the worst possible ways.

There's a tipping point at play here -- the moment when a critical mass of media companies and marketers will realize that they can do just fine (and probably much better) if they don't play ball with YouTube -- and we're arriving at it just about now.

As Viacom's lawsuit against YouTube for copyright infringement continues to plod though the legal system, what's really interesting is how quickly Viacom has gained traction with its own viral-video initiatives. These days, when you see a video from "The Daily Show" on a blog, chances are it's being served up directly from Comedy Central's Motherload, not from YouTube.

Even more interesting is how instantaneously other media companies, big and small, have figured out not only how to bypass YouTube, but how to quickly duplicate its ease-of-use and intrinsic virality (as with YouTube, embedding, say, a MySpace video on your blog is a simple matter of copying and pasting a line of code). Meanwhile, the talent drain continues, with sites such as Turner Broadcasting's Superdeluxe.com and Will Ferrell's FunnyorDie.com locking up viral-video whizzes that you previously would have automatically assumed you'd be able to find on YouTube.

Up until recently, it really seemed like all viral-video roads necessarily led to, or through, YouTube. Seemingly overnight, that's changed -- and I'm amazed at how often I end up (via blog links or search results or links that friends send me) on non-YouTube video sites.

Yes, YouTube continues to grow rapidly -- and it continues to enjoy considerable heat for the role user-generated video agitprop is playing in the presidential race. But tellingly, although you could find multiple user posts of Hillary Clinton's "Sopranos" spoof on YouTube, most viewers seem to have gone directly to HillaryClinton.com (half a million visitors in 24 hours) to see it.

You don't have to wait for the much-hyped, overcapitalized next-gen internet video sites, including Joost, Babelgum and VeohTV (the Michael Eisner-backed Veoh spinoff that quietly made its debut last week) to emerge from their beta trials to see that the days of YouTube hegemony are numbered. Right now, the best new viral-video aggregators and curators -- see two of my favorites in Media Guy's Pop Pick -- are proving to be entirely agnostic about which viral-video sites they cull from.

The mistake we've been making in evaluating mass-market first-mover YouTube has been in thinking that Google-like dominance is possible in the content arena.

But, of course, that's as daft as thinking that we'd always need America Online.

Commentary - Prostitution Is Legal

"Asked how he became a writer: In the same way that a woman becomes a prostitute. First I did it to please myself, then I did it to please my friends, and finally I did it for money."
Ferenc Molnar


Commentary
Prostitution Is Legal
BY Atoosa Rubenstein
http://www.forbes.com/opinions/2007/06/22/atoosa-prostitutes-advertising-oped-cx_ar_0625atoosa.html


Atoosa Rubenstein



Several years ago, during my editor days, I let my American Society of Magazine Editors (ASME) membership expire. I had a magazine to turn around and didn't want mom's rules to get between my team and our audience.

I realized the implications of my decision when the press tried to cook up a mini-scandal connecting my withdrawal from ASME to a "back to school" fashion issue where I'd mentioned several of our readers' favorite retailers by name on the cover (implying this was an advertiser-driven move).

The decision was purely editorial (what teenager isn't loyal to certain stores?), but they suggested I was pimping the magazine out. In truth, no money was exchanged. I felt like I'd gotten in trouble from mom--for something I didn't even do.

The puritans should be aware, though, that today this kind of prostitution is legal. Martha Stewart says it's OK--and whom do we trust more than Martha? As has been previously reported, advertisers who buy at least $250,000 of 30-second spots--hers cost an average of $10,000 compared with Oprah's $100,000--get a branded segment with America's favorite homemaker.

Yes, you heard right, you can essentially buy a segment with Martha! But Martha sleeps with the companies Martha wants to sleep with, thank-you-very-much. She claims to only promote products she truly believes in, which puts her at the top of the corporate prostitution pyramid: a woman in charge of her own affairs.

At the bottom of the corporate prostitution pyramid? Magazine beauty editors. (Not all, just most.) These well-paid, well-heeled ladies are shuttled from press event to press event in Town Cars provided by the advertisers (yes, of course I miss it!) to chartered planes to exotic locations - - wined and dined, fluffed and buffed while their corporate pimps look away. Sure, all the fun comes at a cost: Beauty editors just have to put out a little . . . a credit here, a mention there. Though awards await the ones who put out a lot.

The FIFI Award (for the best Fragrance Editorial), the most fabulous prize of them all, is presented at a beautiful gala in front of the entire industry. But even the smaller ones are nice. Every year at the Cosmetics, Toiletry and Fragrance Association convention in Boca Raton, Fla., Revlon (nyse: REV - news - people ) always gives an award to the magazine at each publishing company that gave them the biggest editorial mention of the year.

How's that for treating your girl right? They may not be raking in the dollars like Martha, but positive reinforcement and perks work well at the bottom of the pyramid.

These special relations aren't just taking place in traditional media. Lonelygirl15, as you may know, is a popular video blog. The world initially thought it was the work of a real teenager named Bree, but it was discovered to be a professional production. Well, "Bree" has just jumped into bed with an advertiser: Neutrogena.

And so Bree will introduce a new "friend" to her cast of characters: a scientist from the skin care company. If Bree were a real teen, she'd probably like Neutrogena products. So it's not like she's shilling something random. That would be even dirtier than the already dirty thought of a teenager in bed with a corporate giant. Luckily in reality they're all adults . . . at least the ones performing.

Now meet someone who is taking product placement to the next level: Robert Verdi, a lively television personality who has hosted a variety of fashion and interior design shows such as "Surprise by Design" on Discovery, which was the network's highest-rated daytime show.

At first, Mr. Verdi cashed in on his cache by building alliances with a slew of brands from Panasonic to Oral B. But he saw opportunities to service his high-end clients beyond the television screen. Enter Luxe Laboratory, Robert's new venture.

This will be a luxurious real life (a beautiful 5,000-square-foot space on West 30th Street) and virtual "brothel" for product placements. Robert has created a chic salon where his most stylish friends can meet his biggest, sexiest clients.

It's a place where the participating brands (like Kohler and Smith & Hawken) can entertain editors, celebrities and other style makers--a place to show them new products and seduce them in the comfort of their own bachelor pad . . . Robert's bachelor pad. Lots of brands were turned away. "I only wanted stuff I would put in my own home." He chooses his bedmates, like Martha.

Listen, I don't stand in judgment. I can appreciate the Martha/Robert model. Only sleep with who you like. So perhaps the advice to the bottom of the triangle is raise your standards when you drop your drawers (but perhaps I'm just mad that I bought a mascara mentioned in a magazine that doesn't work very well) or jump into bed with your consumers and you'll see that advertisers will once again pay you, and pay you what you're worth. After all, as cute as you are, they don't like you in that way . . . they're after your audience.

Now that I'm off the street, I'm mostly spending quality time with my audience: smaller, intimate gatherings. Though there's plenty of prostitution in the online world, I don't want to play that game. I don't want to over-promise on my numbers to compete with the traditional world and their inflated numbers and end up working the streets again. I want to organically build a brand by being true to my Alpha Kitties.

The advertising folks have pushed the editorial door in so far that the audience (myself as a viewer/reader included) have fewer and fewer trusted sources. My girls don't necessarily know that prostitution is legal, and like ASME, I guess I want to try to protect them from that reality. You know what they say - - we all eventually turn into our mothers.

Atoosa Rubenstein left the job of editor in chief of Seventeen magazine to start her own digital business and blogs to the delight of her legion of fans at www.myspace.com/atoosaspage. She has also started a consultancy advising companies how to speak to the teen market . Her own digital network, Atoosa.com, will be coming soon.

BoSacks Speaks Out: Time Inc. Dives Into Digi-Mags

BoSacks Speaks Out: This foray by Time Inc to get further into the Digi-mag world is absolutely brilliant. I have been a fan of Dennis publishing's Monkey Magazine for quite some time, But Monkey Magazine is very busy and almost overwhelming in its pursuit to use all the available technology. Monkey is far too busy for my more simple tastes, but then again, I am not really the intended audience. People Magazine on the other hand, uses the technology with elegance and style. It is understated and very smoothly rendered. The downloads are extremely fast, and almost seamless. This is a terrific display of prowess and my hat is off to Time Inc. Bravo!


As some of you may know I will be debating Samir Husni about the future of our industry this Thursday, June 28th at the Periodical and Book Association of America (PBAA) 21st Annual Convention in Philadelphia. I will no doubt use Time Inc and People magazine as an example of a small piece of the puzzle of the future our publishing business. Check out this link and then imagine a combination of e-paper technology and this style of publishing. Five or six years from now it will be a reality. Actually in five or six years this will probably seem very archaic, but it is still a terrific starting point.

Now before the devoted fans of Samir and the dead trees only society send me nasty notes, I feel it prudent to explain that I am not prophesizing the end of printed matter as we know it. Rather I am suggesting that at some time in the very near future printed products will not be the predominate method of information distribution for publishers. Digital distribution will be the leader, but there will still be an abundance of printed products for those who can afford them.


"The future masters of technology will have to be light-hearted and intelligent. The machine easily masters the grim and the dumb."
Marshall McLuhan
Canadian communications theorist educator, writer and social reformer, 1911-1980

Time Inc. Dives Into Digi-Mags
Exclusive: Taps Huge Subscriber Base for Online Issue of People
By Nat Ives http://adage.com/mediaworks/article?article_id=118739

NEW YORK

(AdAge.com) -- The exploration of those magazine-website hybrids sometimes called digi-mags is taking a big step toward mass reach this week with the introduction of People magazine's first entry in the field.

People's digi-mag Beginning today, some 1.2 million subscribers to Time Inc. magazines will receive e-mails pointing them to People's "Best Summer Ever" issue online. The print magazine, which reaches 42 million adults, according to Mediamark Research Inc., will also promote the online effort. Under scrutinyPeople can't claim to be first with a dynamic, soundtracked, video-packed e-magazine; the Europeans are ahead of us on that front. But the potential scope is new. Time Inc.'s digital extensions, of course, come under a lot of scrutiny, partly because many employees were laid off to free the resources required to fund digital efforts -- and partly because Time Inc. has one failed experiment under its belt already, the ill-fated Office Pirates site. On top of that, no one at People has any idea how well this digi-mag will perform, and understandably is keeping expectations low.

"It's just a nice, fun bonus that we're offering our consumer," said group publisher Paul Caine. Unilever, which has nine ad pages in "Best Summer Ever" and is its exclusive sponsor, got involved for the experience. "Is it a risk?" asked Irene Grieco, the Unilever senior U.S. lead print manager. "It might be. But we've always challenged our partners to come to us with new and innovative and unique opportunities." InteractivityThe 30-page digi-mag starts with an animated cover in which dolphins leap out of the water behind a bathing suit-clad Beyonce Knowles while a "Plus: Matthew McConaughey On The Beach!" tease floats up and down. Surf sounds play in the background. Editorial spreads allow consumers to watch movie trailers, tool through McConaughey photos, try different accessories on a mannequin wearing an Ella Moss dress and play with the advertising.

Buffering delays are eliminated by loading the issue all at once. People's staff designed most of the creative elements but worked with a digital-magazine production company called Blogform Digital Magazines to get the issue built. Unlike magazines digitally reproduced on systems such as Zinio, there's no software to install, there's a different soundtrack for every page, ads are interactive far beyond clickable URLs and all the content is original. Brad Adgate, senior VP-director of research at Horizon Media, shared the others' curiosity. "For certain demographics I think there is a certain appeal, but I don't think it's widespread yet," he said.

"It may be ahead of the curve -- but I don't think it's a bad thing to do." "This thing could pan out or it could be a dismal flop that they learn something from," he added. "This could be a template for future initiatives or this could be something along the lines of New Coke." For now, "Best Summer Ever" is a one-shot test, but expect to see more issues eventually if readers and advertisers like it. "We don't know if this is one of the tools in our kit -- or a new business," said Martha Nelson, the People Group editor. "We have a lot of things we need to find out: how big the audience can be, what kind of life it has, how much they're engaged. We're going to be looking at everything."

You, Too, Can Grace a National Magazine's Cover

"There are no grades of vanity, there are only grades of ability in concealing it"
Mark Twain (American Humorist, Writer and Lecturer. 1835-1910)

You, Too, Can Grace a National Magazine's Cover
By CLAUDIA H. DEUTSCH
http://www.nytimes.com/2007/06/25/business/media/25adco.html?_r=1&oref=slogin
IN the old days - say, maybe a month ago - a "customized" magazine meant that it had ads tailored to your age group or articles about your region. Now, it seems, it has your picture on the cover, too.

A personalized version of the July issue of Wired magazine.
In its April issue, Wired magazine, in partnership with Xerox, invited subscribers to upload their photographs to Wired.com. The first 5,000 who did so are now receiving their July issue with themselves as the cover art.

Not coincidentally, the editorial theme of the issue is the growing personalization of all things in cyberspace, and the headline over the photo is "You are here."
Wired, which is owned by Condé Nast, publicized the promotion to its subscribers via e-mail, magazine inserts and on its Web site. And while the Xerox name is not on the covers themselves, the promotions and Web site made clear that the project depended on software from Xerox and the company's iGen3 110 digital production press.

Neither Xerox nor Condé Nast would disclose costs, but since neither had to farm tasks out to third parties, both say it was not very expensive.
"We didn't make money on this, but it really didn't cost anything," said Drew Schutte, vice president and publishing director of Wired Media.

Which was probably a good thing, since neither company expects to get an immediate rush of sales from the do-it-yourself cover. Wired aimed its promotion entirely at people who already subscribe. And those people tend to be "younger, male and affluent," according to Mr. Schutte, which means they have probably not risen high enough in the corporate ranks to where they can authorize purchases of expensive equipment.

But new sales were not the immediate goal for either Wired or Xerox. Both companies are looking to update their images.
In Wired's case, that meant integrating - or rather, re-integrating - the way it markets itself. In 1998, five years after Wired first started publishing, Condé Nast bought the magazine and Lycos bought the Web site. Lycos, and thus Wired.com, has been through a series of ownership changes since then.

Last July, Condé Nast bought the Web site from Daum Communications, its last owner. It created Wired Media and gave Mr. Schutte responsibility for integrating all of Wired's offerings.
Wired will sponsor a science show on public television this fall, and it is working with a homebuilder in Los Angeles to build a green "wired" home. And, of course, it is trying to draw more traffic to its Web site.

"We're going to give our advertisers the integrated, turnkey solutions that they want," Mr. Schutte said. "But if we're going to create buzz for an advertiser, we want to create buzz for ourselves as well."

So the Wired marketers suggested the collaboration to Xerox. Xerox had done 70,000 personalized covers for the December 2006 issue of Graphic Arts Monthly, in which it printed subscribers' first names as stars against a night sky, and their companies' names on a rocket ship. But that cover used the Graphic Arts database; a reader-generated cover represented uncharted territory.

"We jumped at it, we loved it, it clicked immediately," said Joanna Havlin, a partner in Media Edge: Cia, the media planning and buying unit of WPP that represents Xerox. "It was a way to showcase Xerox as an innovator, a technology leader and a document solutions provider."
It could also help Xerox bury a stereotype. What was once its greatest blessing is now a lingering curse - the name Xerox was so linked to stand-alone copier machines that a whole generation of people used it as a lowercase verb.

These days Xerox sells all sorts of copiers and printers that can be connected to networks, as well as software and services that allow publishers to print books on demand, banks to personalize bills inserts - or, of course, magazines with personalized covers. But the Xerox name is not at all synonymous with those activities.

With this promotion, "Xerox will get to demonstrative an inventive, fresh technology, and it will get a halo effect just by linking itself to a young, edgy brand like Wired," said Allen P. Adamson, managing director for the brand consulting firm Landor Associates.
Granted, few Wired subscribers are likely customers for an iGen3 production printer, a heavy-duty piece of business equipment. But that does not bother Xerox. Indeed, Xerox has been a regular advertiser on Wired.com for more than two years and for even longer in the magazine. For the July issue, it bought the back cover on all the issues; in the 5,000 customized ones, it took the inside front and inside back covers, too.

"The Wired audience is savvy and forward thinking, and even if they are not yet buyers, they are influencers," said Barbara Basney, director of global advertising at Xerox.

Xerox and Wired are also doing some direct influencing themselves. At the March convention of TED - the annual Technology, Entertainment and Design conference attended by high-ranking executives in the advertising and printing world - they set up a booth at which attendees could have their pictures taken. Each will receive a personalized July issue of Wired. They also printed covers for David Letterman, Katie Couric and other television celebrities who could possible mention it on their shows.

And, of course, they reached out to reporters at business publications that reach a wider audience than Wired. "One reason to do an inventive campaign is to get the press interested, since they will write stories that reach the people who make the buying decisions," said Ran Kivetz, a professor of marketing at the Columbia Business School.

Nor is the promotion over when the last July issue is sent. For another two months, anyone can upload a photo to Wired.com, write a headline, and print a personalized cover at home (or e-mail it to friends or post it on blogs or MySpace pages). Xerox, meanwhile, is already working out details with Time magazine's Canadian edition to gives its subscribers a chance to get their September issue with a personalized cover wrapped around the regular one.

All of which raises a question that even the smartest brand specialists or technophiles cannot yet answer. If your cover is on a national magazine, but only on the issue you receive, does that qualify as your 15 minutes of fame?

The want ads department

c"It requires a very unusual mind to undertake the analysis of the obvious."
Alfred North Whitehead (British Mathematician and Philosopher, 1861-1947)

The want ads department

By: Edited by Valerie Block

http://www.newyorkbusiness.com/apps/pbcs.dll/article?AID=/20070624/FREE/70623029&SearchID=73285232776603



Publisher David Carey was pressing the flesh last week during the final stretch of his race to fill Conde Nast Portfolio's second issue with ads. He met with clients to share enthusiastic e-mails from some of the business title's high-profile readers, media buyers say.



His efforts to retain all his advertisers haven't been entirely successful. The debut issue, which arrived in April amid tremendous hype and mixed reviews, had 185 ad pages. The September issue will have roughly 120, a Portfolio spokeswoman says.



One executive at a major media-buying shop explains why some clients whose ads appeared in the first issue will not return: "They expected a more hard-hitting, substantive business environment, and what they got was a fashion-centric, business-as-background type of Conde Nast title," he says.



Portfolio executives say the publication is meeting its original goals, which were to run an average of 125 pages in September, October and November. "This was the plan," says the spokeswoman. "We have solid fall issues and at least 30 new advertisers."



Mr. Carey will be booking September ads until July 10.





Union Rejects Time Inc. Offer

Union Representing Time Inc. Magazine Workers Rejects Contract Offer From Company

http://biz.yahoo.com/ap/070622/time_inc_union.html?printer=1



NEW YORK (AP) -- Members of a union representing editorial employees at Time, Fortune, People and other magazines at Time Inc. have unanimously rejected a contract offer from the company.

The Newspaper Guild of New York said Friday its members had voted 133-0 to turn down the company's offer, which the union said would have "drastically cut" severance pay, provided no guaranteed wage increases and allowed the company in several cases to change health coverage without consulting the guild.



The union has filed a complaint with the National Labor Relations Board claiming that the magazine publisher, part of the media conglomerate Time Warner Inc., has been bargaining in bad faith by presenting proposals that "demonstrate a lack of intent to ever reach an agreement."



Negotiations have been going on since last December, and the most recent contract expired on March 22, the guild said. In January, Time Inc. announced nearly 300 job cuts, including 100 union-covered jobs.



In addition to editorial employees at Time and Fortune, the guild also represents workers at Time Inc.'s Fortune Small Business, Money, People and Sports Illustrated magazines.



Time Inc. spokeswoman Dawn Bridges said in a statement that the company "gave the union very fair and reasonable proposals, including generous severance, a merit pay system and overtime after 40 hours work. Our hope and expectation is to reach a new contract."




http://www.minonline.com/min/
The Weeklies'/Biweeklies' 2007-Versus-2006 Ad Pages At Mid-Year: "Gossip" Remains Advertising Stronger Than "Real" News And Business.

We do not know whether the ever-growing legion of Us Weekly/InTouch/Life & Style Weekly and Star readers fully believe the never-ending pregnancies/anorexia/bulimia/obesity/marriages/separations/divorces afflicting America's celebrities, but advertisers continue to believe in the product. All of the aforementioned are up significantly in ad pages through the first half, with Bauer Publishing's IT (+30.20%) and L&SW (+51.83%) posting the biggest differentials overall. (Success did not stop L&SW editor-in-chief Mark Pasetsky from dismissing seven staffers last week.) That suggests quite an ad "welcome wagon" for Bauer's planned September launch of Cocktail Weekly, which advertising president Ian Scott said (min, May 7, 2007) will be less gossipy and more in the beauty/fashion/relationships mold of Cosmopolitan and Glamour. But, given the numbers, it is not only a woman who has the right to change her mind.

People (-1.91% through June) is not on this ad gravy-train perhaps because it is not gossipy enough, but it certainly earns more than its rivals combined. Conditions are tough at Newsweek (-7.21%) and the restructured Time (-5.57%), and continue to be so at BusinessWeek (-12.58%), Forbes (-3.52%), and Fortune (-17.43%). The much-improved economy and strong stock market (in spite of end-of-first-quarter concerns) is not yet reflected here.

We cannot guarantee that TV Guide's +29.74% first-half has removed it from intensive care, but the differential is the most pleasing since its major overhaul in October 2005. New-to-min's-boxscores The Nation did better "left" (+23.03%) than National Review did "right" (-7.77%).

What Can Magazines Learn From Newspapers' Digital Transition?

Hegel was right when he said that we learn from history that man can never learn anything from history.

George Bernard Shaw (1856 - 1950)


What Can Magazines Learn From Newspapers' Digital Transition?
Posted by: Scott Karp
http://www.foliomag.com/page.asp?prmID=273&dspMore=1&prmPID=118&showmonth=6#118


So often you hear generalizations about the future of print publishing, e.g. print is dead, newspapers are doomed, online revenue is soaring, print revenue is shrinking. None of these generalizations tell you what's actually going on at the P&L level, which all publishers have to manage in age of rapidly changing media economics. There's nothing like digging into the actually numbers to give you a sense of how the publishing business is transforming, especially in comparing the economics of digital to the economics of print.

I was struck today by the data flowing out of the Newspaper Association of America's Mid-Year Review:

As we reported last week, Media General's May print ad revenues fell 14.9 percent, to $42 million from $48 million, while the interactive division posted a rise in May 2007 revenues of 43.1 percent to $2.8 million from $2 million the previous May. At Tuesday's presentation, COO Reid Ashe told attendees: "For many things, the internet is now our primary medium."

Although not presenting until Wednesday morning, Lee Enterprises, the Davenport, Iowa-based publisher of the St. Louis Post-Dispatch and other newspapers, issued its May figures on Monday: online ad revenue was up 60 percent in May to $5.3 million from $3.3 million year-over-year. In general, advertising revenue declined 1.7 percent to $73 million from $74.6 million, for the same period. Combined print and online classified revenue for the month was pretty much flat, coming in at $29.1 million from $29.2 million in May 2006. Lee's claimed its websites attract more than 11 million visits per month. Lee expects June's declines to be similar to May's and April's.


These numbers are really astonishing when you look at them -- and when you do the math that no one ever does in press releases. Media General's print ad revenue is down $6 million for May year-over-year. But online is only up $800K. That's a net loss of $5.2 million! Online revenue may be up 43.1 percent, which seems like a lot, but it really needs to be 10X that. The caveat, of course, is that the $800K in online is more profitable, but is it really, given how much of newspapers are using print content online?

The Lee numbers are even more striking. First, the $2 million year-over-year increase in online ad revenue is impressive in absolute terms. Even more impressive is that this increase in online ad revenue is nearly compensating for the decline in print ad revenue.

But this is what really gets me -- Lee's online ad revenue is online 7% of it's total ad revenue -- yet Lee reaches 11 million per month online across its newspapers. That made me wonder how many people Lee reaches in print:

As Lee's paid daily circulation held stable at 1.7 million daily and 1.9 million Sunday, total print plus online audiences keep growing.

Think about this -- advertisers paid $67.7 million to reach about 2 million people in print -- but they only paid $5.3 million to reach 11 million people online! Now, granted, it's not as simple as that, since not all 11 million people visit the site every day. But still.

Clearly, newspapers have a BIG pricing problem. And that's where the lesson for magazines comes in. Print publishers, both newspapers and magazines, have long enjoyed monopoly pricing. Even in competitive magazine categories, there were typically only 2 or 3 books competing for ad dollars to reach a particular audience. Online competition has exploded, thanks to cheap publishing tools like blogging software. Newspapers have been the hardest hit by the loss of pricing power, since most newspapers enjoyed a true monopoly, and news has become highly commoditized online. But there are few topics or niches where there aren't new sources of information proliferating online -- in many cases, A LOT of new sources.

But it's not just competition that has created such huge disparities in pricing and media value. For most print publishers, the online pricing problem is, to a large degree, a self-inflicted wound from all of those years of giving online away as "added value" to advertisers paying top dollar for print ad pages. Publishers taught advertisers to devalue online, and now that advertisers are devaluing print, it's hard to convince them that online is worth at least as much as print -- if not more.

So what's the lesson for magazine publishers?

1. Advertiserswill value your online audience not a penny more than how you value it,and likely a lot less -- that means you need to price onlinecommensurate with its value and you need to make it the site LOOKvaluable -- so much of the appeal of print is in the appearance.

2. Keep advertisers focused on media 101 -- a larger audience, assuming it's all the right people, is worth MORE, not less.

3. Reachingpeople in their preferred medium or one with a high degree of utility,e.g. email newsletters, has MORE value for advertisers, even if the adunits don't have the same aesthetic appeal as a glossy print ad.

4. Evenif your online ad revenue is small or non-existent, seize control of itNOW -- don't wait, like newspapers did, until the horse is out of thebarn.

Scott Karp writes for Folio online about digital media and its impact on magazine publishing, and also on Publishing 2.0, a blog about how digital media is transforming the entire media industry.

'Cyberphobia' afflicts many Time Inc. writers

Never fear shadows. They simply mean there is a light shining somewhere nearby."
- Unknown


JON FRIEDMAN'S MEDIA WEB
'Cyberphobia' afflicts many Time Inc. writers
Commentary: By Jon Friedman, MarketWatch



NEW YORK (MarketWatch) -- This column is a public-service announcement: I want to help some needy, ignorant people conquer an illogical fear.
The group consists of many journalists at Time, Fortune and presumably other pockets of the "old media." Their nemesis is the dreaded Internet. Somehow, they seem to have developed a serious case of what I'd call "cyberphobia."

I would like to propose a sure-fire solution to Rick Stengel and Andy Serwer, the respective top editors at Time and Fortune. Both are published by Time Inc., a division of Time Warner Inc. What's required isn't an outpouring of tender loving care -- not that Time Inc. is exactly a touchy-feely company these days, anyway. Instead, I'd recommend that Stengel and Serwer kick prima donnas, who think they're too good for online bylines, in their backsides.
The editors should issue this warning: "Write for my Web site or you're history."

When journalists start writing for the Internet or a blog, they often find what I discovered when I joined MarketWatch nearly eight years ago. This is the most demanding, liberating, creative and fulfilling work available today in journalism.
It's a hell of a lot of fun, too.

Time magazine spokeswoman Betsy Burton reported in an e-mail message: "We're doing well on the Web and have large participation by staff. We have 12 blogs and May was the highest traffic month yet, with over 4.6 million unique visitors and [the] time spent by users on the site up by 50%." Fortune is also pleased with its progress. "Most Fortune writers produce for both the magazine and the site," according to spokeswoman Danielle Perissi.

Get tough
I suspect that the leaders of Time Inc., particularly Editor in Chief John Huey, are pushing the magazine's senior managers to put the Web on the front burner.

On Monday, Andy Serwer, the managing editor of Fortune, told me: "I'm going to hold people accountable on the Web. Their compensation, in part, will be tied to how much they do online."

To me, this is the journalistic equivalent of Mommy or Daddy telling Junior that he had better clean up his room, or else he won't get any dessert.
The following day, Gawker's Doree Shafrir had a story, headlined "Time Shoving Its Reluctant Writers Online."

While Stengel, Time's managing editor, informed his staff that the relaunched Time.com has seen page views jump 70% over last year he chastened the troops: "We're doing well ... but not well enough." The problem is that Time.com "needs more content, much more," he said.
Stengel acknowledged that many of his people are contributing to the Web effort. But he noted that the list of contributors "needs to grow. ... Evaluations of every Time writer, correspondent and reporter will be based on the quality and quantity of the contributions each makes to both the magazine and to Time.com."

Then Stengel qualified his reprimand: "I suspect that some of you regard writing for Time.com as an obligation, and not what you came to Time to do. But times have changed, and we have to change with them."

Sheesh. If any of them needs to be prodded to get up to speed, they can talk with journalists who just lost their jobs at, say, the San Jose Mercury News and the San Francisco Chronicle. They could also pick the brains of the ex-Time magazine employees who were shown the door in the past year.

"The memo was a reminder to staff about moving things even further forward," Time's Burton told me.

Meanwhile, Sports Illustrated, also published by Time Inc., gets it.
The magazine's best-known writers, Peter King, Rick Reilly and Tom Verducci, are all on board. Plus, Media Industry News noted that in the month after the SI relaunch of recently acquired FanNation, a social-networking site, the site contributed 4 million monthly unique visitors and 30 million page views to SI.
I'd recommend that Time and Fortune spring for a cameo by Alec Baldwin.
Progress
Time Inc. says it's making progress.
Spokeswoman Dawn Bridges points out that her company ranked 12th among media properties in terms of page views. Time Inc. also has built a studio in the basement of its headquarters and is "aggressively pursuing video online."
Still, I can't get away from the conclusion that the editors feel the need to cajole, if not plead with, their writers to jump on the bandwagon. That's certainly not what Stengel came to work on at Time.

Time Warner is famous for its events. So I'd recommend that Time and Fortune spring for a cameo by Alec Baldwin. He could reenact his memorable scene in "Glengarry Glen Ross."
To light a fire under a room of jaded salesmen, Baldwin's character tells them: "We're adding a little something to this month's sales contest. As you all know, first prize is a Cadillac Eldorado. Anybody want to see second prize? Second prize is a set of steak knives.
"Third prize is you're fired." Watch the video clip.

What Circulation Taught Me

"If once you forfeit the confidence of your fellow-citizens, you can never regain their respect and esteem."
Abraham Lincoln (American 16th US President (1861-65), who brought about the emancipation of the slaves. 1809-1865)


John Griffin
President, National Geographic Magazine Group

http://www.magazine.org/press_room/speeches/23012.cfm
What Circulation Taught Me

Circulation Management Conference & Expo


As a former circ nerd, there are few things more beautiful to me than a 50% sell through or an 85% renewal rate, but now that I am the president of National Geographic Magazines I am inspired by other sights as well . . .

It is a privilege to lead this great brand in all disciplines but I will always love the creativity, clarity and detail of circulation. My circulation trainings has influenced how I think about managing national geographic magazines in the 21st century and how I see my responsibilities on the ABC and MAP boards.


What circulation taught me

In 1979 when I was made circulation director of PVN (cir 1,900,000) my prior publishing experience had been as an editor. In my most recent job at the exceptional parent magazine, In addition to being managing editor I also managed its circulation of 20,000. What maniac would hire a person who never seen a spreadsheet, never mailed a direct mail package, and thought of himself as an editor to be the circulation director of a magazine with 1,900,000 circualtion? Bob Teufel, the first of my three great teachers.



Bob taught people at Rodale to:

respect your customers
respect and learn from coworkers and competitors
be creative and aggressive
and that the only test you will regret is the one you don't do
Bob himself had moved from circulaton director to president, so he knew that more important than formal training is an aptitude for math and for marketing, a respect for people and brands and an enthusiams to learn and test.


Bob had the rodale circulation department work with a consultant named Gordon Grossman-Gordon had been the circulation director and more at the reader's digest where he had introduced the sweepstakes, regression analysis and led the transition of circulation from the creative age to the computer age. Gordon taught us how to think not only about circulation but about business:

leave no idea unchallenged
good decisions are impossible if you don't understand the numbers in aggregate and in detail
and that when you find success be aggressive in capitalizing on it.
Teufel also put me in charge of single copy sales which Rodale at the time did none of. Having no idea how single copy sales worked, I went to a conference where Mike Andrews spoke. Mike was a retail consultant who had been the circulation director of The New Yorker and then had launched penthouse in the us. As Mike would say I went from class to --.


Mike taught me that the retail business was:

a business of detail
of finding what works in one town or even one retailer and then aggressively duplicating that success in other towns and in similar retailers.
And in those days with over 400 wholesalers, 400 separate experiments in your magazine's distribution, it was almost always possible to find something to build on. While the distribution system has consolidated and changed these principals still hold.


These three people and an amazing group of executives-Pat Corpora, Bob Reinhart, Ed Fones, Barb Newton, Joyce Shirer, Rich Alleger and now Terry Day-and suppliers-especially Bob Castardi at Curtis-reinforced these lessons and taught me many new ones.


Some of the things I learned as a circulator:

lessons
editorial leads
the importance of positioning
sell benefits
substance, quality and leadership sell
live in a fact based world
understand that patterns and trends matter
make numbers pass the common sense test
too much data is as bad as too little data; act now
aggressively follow up on success
pay attention to you two major cost centers: circulation expense and production expense
good ideas can come from anywhere
as a person who came up through the circulation side of publishing, I have a strong point of view about the current state of our business that I bring to my roles on the board of ABC and MPA.
The future and the abc

In our business we are dealing with new media, recent circulation scandals, new abc rules and circulation categories, and changing reader and advertiser expectations and demands. I'll start by describing the world as I see it.

Magazines suffer from troubles of their own making
Because of the poor circulation practices of the recent past- especially the practice of counting unpaid circualtion as paid-magazines have a credibility problem with the advertising community. While the creation of the verified category has brought more transparency to the abc statement, we still spend a stupid amount of time dealing with the past instead of building for the future.


Importance of advertising revenue increases
It is likely that advertising revenue will remain the primary source of revenue for magazines and probable that, for large magazines, it will increase as a percentage of total revenue, especially as we are able to increase our sale of on-line advertising and other kinds of parnerships that our strong brands can bring to advertisers.


Comparability a necessity
While advertiser's enthusiam for micro targeting and response based advertsing evaluation may wane, the demand for

greater comparability between media and
accountability for achieving advertising goals will remain or grow.
Demand for speed
advertisers will want to buy advertising as late as possible and evaluate effectiveness as soon as possible after an ad runs-the demand for speed will only increase. Magazines will always be at a disadvantage but we must minimize that disadvantage. Sometimes we speak only as a print magazine owner, other times as a multi-media brand owner. In this case print magazines may be at a disadvantage but online magazines brands will not be.


In face of these challenges,

What is a consumer marketer to do?

Distribution and paid circulation are measures that have nothing to do with the effectiveness of an ad. And they are comparable to no other media. Even newspapers are beginning to move to audience measurement and possibly to combined measurement of web and print audience. If we don't change, then magazines will be comparable only to themselves. This will not happen, so prepare to have your work judged on audience size and quality as we have traditionally been focused on paid circulation and distribution.


It will take some time to create accurate, stable, and fast issue by issue audience measurement. But we can deliver transpaprent distribution data faster with tools we have at hand-verified circualtion for transparency and rapid report for speed.


I challenge us all to make distribution completely transparent-to put all sources that leave the possibility of abuse into verified and to report distribution early through rapid report. If we do this we can hopefully regain the confidence of buyers by putting the discussion of value where it belongs-in the negotiation between buyer and seller, and take it away from the ABC board and off the front page of Ad Age. If you really think penny sold distribution has greater value than free public place distribution, argue it in the sales process, but don't keep categories on the ABC statement that allow for abuse and an industry focus on the minutia of distribution and not the effectiveness advertising.


What we don't need is more abc rules. What we do need is transparency on distribution and faster reporting while concurrently moving to fast audience measurement.



So lets drop the smoke and mirrors and enjoy the process of creating great editorial material that provides a positive environment for advertsiers and put it in front of the people who want it and need it in print or digitally or however they want it.


And if all this sounds hard and like a big pain, just remember you could be working in a chinese chicken factory.