Friday, July 27, 2007

John Locke To Al Gore: Tech Changes, Advertising Remains

John Locke To Al Gore: Tech Changes, Advertising Remains
Posted July 24th, 2007 by Joe Marchese
In a piece in the New York Times by John Broder regarding Al Gore's intentions to leverage advertising to continue his crusade against global warming, Broder quotes Gore: "The way nations and societies make up their minds in the modern age has much more to do with mass advertising than many of us purists would like, but that's the reality."

This idea made me revisit one of my favorite philosophical passages, written by John Locke in 1678: "The principle spring from which the actions of men take their rise, the rule they conduct them by, and the end to which they direct them, seems to be credit and reputation, and that which at any rate they avoid is in the greatest part shame and disgrace."

After citing examples, Locke concludes: "He, therefore, that would govern the world well had need consider rather what fashions he makes than what laws, and to bring anything into use, he need only give it reputation."

I have always thought that the beauty of philosophy is its ability to reduce what consider common sense into artful phrases that set a baseline for dialogue. I can't imagine anyone in the advertising industry who hasn't considered it his or her job to bring a product or service into "fashion" or give their product or service "reputation." But how many times have you stopped to think that advertising is how we change the world? For better and for worse. From propaganda to patriotism (many times the two becoming dangerously entwined), various forms of advertising has shaped our history. The ability to formulate and communicate a message to the masses - from buying a product to voting in an election - will always be the means by which a culture shapes its future.

The ad industry needs to take stock of the massive potential shockwaves digital and social media will have on market shares and bottom lines. We should also consider the implications of how media and advertising shifts will affect the ability of our future leaders' to move us to take positions on important issues. More importantly, to take actions that will affect change - such as who those leaders are!

As thought leaders in digital and social media advertising, it valuable to determine how those messages will be directed in new mediums. What advantages do social media potentially afford issues that need more attention, but don't have the budget to buy mass media? My question is this: How can the fragmentation/democratization of media improve our ability to raise our cultural consciousness through advertising?

The biggest advantage positive messaging has is that it's a great product to work with in an environment which demands "pull" advertising. Remember, being innovative in your methods of advertising won't mean anything if you're not inspiring. We should remember that fear and hate can be just as powerful, and sometimes more powerful methods for motivating people to take action. Both utilize social media's unique attributes.

With inspiring cause in hand, wielding social media correctly can prove to be an amazing asset. You can follow any number of steps laid out by social media marketing thought leaders, such as engaging your audience to create your messaging, such as Gore's Create-an-Ad contest to fight global warming. Additionally, causes can leverage social media's ability to create dialogue to educate and provide access to information and interaction. Finally, social media has a way of keeping a message, whether it be for a product or a cause, in fashion. The message borrows the attributes of the medium through which it is delivered, although anyone who has watched the YouTube debates might argue against this.

I disagree with Gore; mass advertising has no more to do with how people make up their minds in the modern age than it did at any other point in our history. (If anything, "mass" advertising is loosening its vice grip on influencing culture.) Advertising is just a method for distributing messages to people that has reached a critical juncture - and that must be understood by "those that would govern." I think Gore's on the right track. OK, time for me to get off the soapbox. What do you think? What would you do to help your favorite cause leverage social media?

HP Targets Teens With 'Mind Control'

HP Targets Teens With 'Mind Control'

By Brian Morrissey

NEW YORK Hewlett-Packard is launching a back-to-school campaign with a twist: 70 percent of the spending will support online efforts.

The shift reverses HP's '06 back-to-school spending strategy, when the company earmarked 70 percent of the media outlay for traditional channels. The company is making the change largely because it has broadened its target audience this year from parents buying computers to include teenagers who often drive purchase decisions.

"They are to large degree the decision makers," said David Roman, vice president of worldwide marketing communications at HP's personal systems group, of the teens targeted. "We wanted to speak in an engaging way to parents and kids."

"The 'Society for Parental Mind Control'" push, created by Interpublic Group's McCann Erickson in San Francisco, centers around teens' desire to make their parents do what they want. It uses several viral elements to encourage teens to spread the message. At the center of the effort is a brand site that allows visitors to send "mind control" messages to their parents with specific products like a laptop or desktop.

The campaign has begun rolling out and will run until September.

Executions designed to drive users to the site will run on many social networking sites like MySpace, Facebook, Bebo and Flip. Roman said the media plan, created and executed by ZenithOptimedia, includes 80 sites, with more money going to niche areas where teens spend more of their time.

"We're going much more to the community sites than the traditional portals," he said.

Offline executions, mostly geared to parents, include a series of direct response TV ads and a Sunday supplement. Roman said the budget shift came at the expense of TV and print. HP declined to reveal overall spending for the push.

The campaign is a change not just in its media choices, but also because the company is tying what is normally a promotions-driven seasonal campaign into a broader brand message. HP a little over a year ago launched its brand campaign, "The computer is personal again," from Omnicom Group's Goodby, Silverstein & Partners, featuring Jay-Z and Shaun White and positioning HP as an edgier, even hip brand.

"It's a lot more credible campaign," said Tracey Trachta, director of consumer advertising at HP's personal systems group. "I don't think two years ago we could have taken this creative approach."

HP hopes the campaign will have viral appeal through a series of offbeat, humorous clips produced by the Malloy Brothers, who have created music videos. In one, two office workers wearing tinfoil hats gather at the water cooler to discuss the effects of parents with their minds controlled by their kids. "Before I knew it, I bought my son a monster truck and let him build a half-pipe in the living room," says one. "I heard Bob in accounting put a stripper pole in his son's bedroom," replies the other worker.

The work will live on, YouTube and other video sites. (Tamer versions form the basis of some of the TV spots.) HP hopes the videos follow the viral success of "Fingerskilz," an effort from the U.K. last year purporting to show a bored office worker's fingers juggling a rolled up paper soccer ball.

Depending on the back-to-school campaign's success, the "mind control" theme could be revived for other promotional periods, such as the holiday season, Roman said.

"If we find the idea is strong, we'll keep it going," he said.

Playboy, Others Refuse to Learn From History

Playboy, Others Refuse to Learn From History
By Al Ries

Playboy is digitizing its entire archive. All 636 issues of the magazine will be rendered page-by-page on six disks, one for each decade. Price: $100 per disk.

Playboy's $600 digitized collection of every issue is a perfect example of the line-extension trap, says Al Ries.

What a mistake.

Every time a new medium arrives, older media players think, "What an opportunity to extend our franchise." So magazines and newspapers and radio and TV outlets are jumping all over themselves to digitize their brands.

They should check Playboy's history. Over the years, Playboy has extended its brand into clubs, casinos, books, videos, cable channels, calendars, clothing, condoms, cigars and cola, among other things.

In 1971 Playboy went public for $23.50 a share.

Current price: $11.24 a share and it could go lower. In the past nine years, Playboy Enterprises had revenues of $2.9 billion, yet managed to lose $95 million.

In spite of these dismal results, many experts applaud the Playboy approach. Here's how a founding partner of a worldwide management consulting company, and the author of six books on strategic thinking, describes the Playboy approach: "A user/customer class-driven company is one that has deliberately anchored its entire business around a describable and specific category of end users or customers. The company then tries to satisfy a range of related needs that stem from that class of end user. . . . Playboy, for instance, is a good example of a company pursuing a user-class-driven strategy. The phrase 'Entertainment for Men' on its magazine cover spells it out quite clearly."

Does this all make sense? Sure it does. But common sense is not marketing sense, which is something quite different.

Playboy fell into the line-extension trap, the most common fault in marketing. A guy who lives in his pajamas in a Holmby Hills mansion might not get the respect of media mavens, but the truth is, much of the media industry is making the same mistake as Playboy. It's the urge to digitize everything they do.

Everyone's in on the act
The British Broadcasting Corp. is preparing to spend $170 million over the next five years to puts its TV and radio shows on the net. Programs will be available for seven days after they are first broadcast. Since the internet shows will be free, the BBC is likely to rack up a big loss on the deal.

Line extension is rampant in the media. Take Talk magazine, or rather Talk Media, a company founded in 1998 by Tina Brown and financed by Miramax, a division of Disney. The former editor of Vanity Fair and The New Yorker, Ms. Brown announced that she would, according to The New York Times, "publish a new monthly magazine, publish books and produce films and television programming."

Twenty-nine months after its launch, Talk magazine folded, losing a reported $54 million, including the money spent on a launch party on Liberty Island for 1,400 of the world's most famous people.

Multimedia has been a buzz word for years. "Investors just can't get enough of multimedia," reported Business Week. "Wall Street has bid up the shares of almost all media companies, figuring they'll offer much of the information that will give multimedia zing. Most publishers, meanwhile, are rushing to set up on-line services."

When was this published? Last week? Last month? Last year?

No. Business Week reported on the multimedia movement in its December 6, 1993, issue. That's more than 13 years ago.

"Multi" is one of the most dangerous words in the dictionary. Multimedia, multiplatform, multifunction, multichannel, multidigital, multifaceted. Whenever you hear the word "multi," you can be pretty sure it's a sign of trouble.

Not learning from the past
Did Harvey Weinstein, founder of Miramax Films with his brother Bob, learn anything from the Talk disaster. I'm afraid not.

His new venture, Weinstein Co., is making the same mistake as Talk Media. "The Weinstein Co. is positioned more as a diversified boutique media company," says Time magazine, "encompassing home video, cable television, Broadway theater, book publishing, video games and, of course, the Internet."

"We've already done a movie company," said Harvey, "Today we're in the business of providing content and our own distribution pipelines."

Early returns are not good. "This fiscal year has been a disappointing one," according to a Weinstein board member quoted in Fortune last month.

The computer industry is also focused on the notion that "content is content." The only difference is how it's packaged and where it's viewed. Here's where Hewlett-Packard is headed, according to CEO Mark Hurd: "To integrate content across the home, whether it's emanating from the web, from satellites, from cable, or the PC, and bring that to the consumer's touch."

Howard Stringer, CEO of Sony, recently said something similar: "Synergy is back with a vengeance and I don't have to defend myself anymore, because the ability to access content any time, anywhere, on any kind of device is now accepted."

There's an assumption that the sender provides the content and the receiver decides the medium in which he or she wants to read, listen or view the content. Would that life be so simple.

Big differences
There are enormous differences between the five mass-communications media that have been introduced over the course of human history. The five are:
The book
The periodical, including newspapers and magazines
The internet
(The telephone is a useful communications device, but it's not a "mass" communications medium.)

Each medium is unique with its own characteristics and its own reason for being. That's why no new medium has ever replaced an existing medium. ("The medium is the message," wrote Marshall McLuhan, and there's a truth buried in this assertion.) Each new medium is layered on top of older media, forever changing and modifying them.

Why in the world would anyone think that TV is dead and that everybody is going to watch video on their computers or (even worse) on their cellphones?

Yet that's what Bill Gates predicted at the D: All Things Digital conference last year. (Television is currently alive and well. More people watched more television on their TV sets last year than any other year in history.)

The periodical didn't replace the book. Radio didn't replace newspapers or magazines. TV didn't replace radio. And the internet won't replace any of the four traditional media.

In addition, very few brands have made a successful transition from an older medium to a newer one. Remember "USA Today on TV"?

Putting a magazine on radio or TV never worked either. Literally dozens of publications tried to take their successful print formula into the radio and TV arena. They all failed.

Why? The essence of radio is the human voice and the essence of TV is motion. A printed piece just sits there, says nothing and doesn't move.

A new medium needs a new concept and a new brand. The most successful internet brands have not been,, or any other line extension from a traditional medium.

The most successful internet brands have been new brands such as Google, Yahoo!, Amazon, eBay, You Tube, MySpace, Facebook, Priceline, Craigslist, Wikipedia, AOL.

Stay where you are
Every print publication thinks it needs to expand into the internet to be successful. It's exactly the opposite. Stay where you are and launch a new brand on the web.

There are, of course, some small multimedia successes. Perhaps the most notable of the multiplatform operators is The Wall Street Journal with some 931,000 subscribers to its online service.

But I question whether the Journal is a "financial" multimedia success. Despite that the Journal is the most powerful, most respected publication in the country, it reportedly lost money last year.

It was back in 1996 that the Journal launched its Interactive Edition, which later became WSJOnline. That was two years before Google was founded by two Stanford students.

Today, Google is worth $169 billion on the stock market, while Dow Jones is considering a $5 billion offer from Rupert Murdoch's News Corp.

Instead of launching an online edition of the Journal, what if Dow Jones had said to themselves, "What can we do on the internet that takes advantage of the unique properties of the medium itself?"

And one of the unique properties of the internet is not the ability to take a printed piece and put it on a video screen. Nobody wants to read a lot of words on a cathode-ray tube. The internet magazine or newspaper is as likely to become a long-term success as the electronic book.

Yet the multimedia craze will probably be with us for a long time. A buzzword is a pit bull. Once a buzzword grips the imagination of an industry, it seldom lets go.

Everybody's doing it ...
You might think Lifetime is just a cable TV network. Wrong. "Lifetime has the opportunity, if we play it right," says CEO Betty Cohen, "to be the leading integrated electronic media company for women. That's what we should be. Not just a cable network."

You might think Conde Nast just publishes magazines. Wrong. "Conde Nast does not like being called a mere magazine company, although it publishes 27," reports The New York Times, Aug. 8, 2006. "We're content providers," said Richard D. Beckman, president of the Conde Nast media group.

You might think USA Today is just a newspaper. Wrong. Advertising Age, Sept. 9, 2002, called the newspaper a "multiplatform media brand." According to the daily's publisher-president, Tom Curley, "We are no longer a newspaper; we are a network. We feed content to television. We feed content to the Internet from the same core platform."

You might think ESPN is a TV company. Wrong. "We are not a television company," says ESPN executive John Skipper. "We're gonna surround consumers with media."

You might think a conference sponsored by the Television Bureau of Advertising would focus solely on TV. Wrong. For the first time, the conference was developed to a single topic: the importance of the "multiplatform." That is, offering content and advertising not only on local broadcast stations but also online, on cellphones and other wireless devices, through video on demand and on video iPods.

You might think Time Inc. is just a magazine publisher. Wrong. "I've got a thousand brilliant print salespeople who are going to be transformed into a thousand brilliant multimedia salespeople," said Ann Moore, chairman-CEO, Time Inc. "We are a content company, OK? We create and we edit, and we aggregate the best content out there. We can deliver to you, our reader, in whatever format you want it in the future -- maybe not on paper."

Some 25 years ago, one of the biggest believers in multimedia was ... me. Our advertising agency was hired by Norelco to prepare advertising for its new multimedia projector and we got very excited. "The one machine that mixes slides, movies and sound" was the headline of our first ad.

Needless to say, the multimedia projector went nowhere.

~ ~ ~
Al Ries is the author or co-author of 11 books on marketing, including his latest, The Origin of Brands. He and his daughter Laura run the Atlanta-based marketing strategy firm Ries & Ries. Their website is

The Best Publishing Companies to Work for

BoSacks Speaks Out: The Best Publishing Companies to Work For

This is going to be great fun. I encourage everybody to read Noelle's article below and fill out the publishing questionnaire.

My, oh my, the stories I could tell. I'm sure we've all had similar experiences and perspectives. For me, I make no bones about it; I have worked for some of the worst, craziest, most self-absorbed, nut cases in the universe. I have also had the great pleasure to work for and with the best, most intelligent, giving and supportive supervisors the planet and the world of publishing has ever produced. So, at the end of the day, or at least at the end of the zenith of a long career, I have attained tremendous perspective of the do's and the don't-ever's in corporate publishing. Someday I intend to write a book of these experiences titled, "Are those guy's idiots or is it just me?"

Please read below and fill in your own Dickensian tales.

"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness . . . it was the spring of hope, it was the winter of despair . . .

Charles Dickens

The Best Publishing Companies to Work for

Noelle Skodzinski

Whenever I saw Fortune's annual list of "Best Companies to Work For" come out, I always wished there was such a list for the publishing industry. Many times, when perusing the job market, I knew next to nothing about many companies, and if I didn't know anyone at the company, I'd basically be taking my chances working there. My desire for some guidance in this area grew after working at one company that had a history of extremely high turnover (and some crazy stories to go along with it) and whose publishers had a horrible reputation (unbeknownst to me). My first week there was one of the strangest weeks of my life, with someone I would very realistically compare to "Mommy Dearest" as one of my bosses. Good times, indeed . . . but how nice it would have been to have a list of GOOD companies to work for.

Anyway, little did I know then that at some point in my career I would be the editor of a magazine for the publishing industry and that I would have the opportunity to create a list of the "Best Publishing Companies to Work For." I am so excited to announce that Publishing Executive is creating such a list--the first ever of its kind-and we will publish the results in our October issue.

I have been excited all year long about this project, and the excitement is just building as it gets underway and I see the number of responses we're getting. The project has been a bit of a bear, and it makes me appreciate the work that goes into Fortune's list all the more. But, we're using an outside research company (Accelara) that has been great in providing direction and setting everything up, including the rating system and very specific survey questions.

Invites to Publishing Executive readers started going out this week. If you didn't receive one or just didn't get a chance to fill it out yet, you can go to to participate. In addition to contributing to this major publishing industry resource and making it all the more useful to everyone in the industry, there are some awesome prizes (a GPS system, an iPhone, a BlackBerry, among others) you can win by participating. And, as someone in the industry who has been waiting for this list for a long time, I really appreciate your input.

Hungry for younger readers, newspapers should embrace their voices

Hungry for younger readers, newspapers should embrace their voices
Declining newspaper readership, especially among the young, is forcing editors to reexamine their focus.
By Larry Atkins
Why is it that every time an issue concerning young people arises, the newspaper op-eds commenting on those issues are almost always written by people in their 40s, 50s, or 60s? Whether it's a columnist or a parent talking about their child's college graduation or how kids in the 1950s settled disputes with their fists instead of guns, it's a tired old paradigm.

If newspapers want to reach out to younger readers, they need to include their voices.

For the past few years, many people and publishers have lamented that young adults tend not to read newspapers.

A report released July 10 by the Joan Shorenstein Center on the Press, Politics and Public Policy at Harvard University showed that young people do not follow the news closely. Only 16 percent of 18- to 30-year-olds surveyed in the study said that they read a newspaper every day and 9 percent of teenagers said that they did.

Circulation is declining for most major American daily newspapers, including 8 percent for the Los Angeles Times, 6.7 percent for The Boston Globe, and 5.3 percent for the San Francisco Chronicle, according to the semiannual Audit Bureau of Circulations' Fall 2006 report.

The declines in newspaper readership are greatest among young adults and the younger segment of baby boomers, reports the Columbia Journalism Review.

Most young people tend to get their news from the Internet or television shows such as Jon Stewart and Stephen Colbert. I teach journalism as an adjunct professor at Arcadia University in Glenside, Pa., and Temple University in Philadelphia. Each semester, when I go around the room to see where my students get their news, hardly anyone mentions daily newspapers.

In the past few years, some newspapers have attempted to reach out to this younger group. In November 2002, The Chicago Tribune started a special tabloid geared toward younger readers called RedEye, which has 280,000 daily readers. Newsday has a weekly "New Voices" feature, which encourages college, high school, and middle school students to submit op-eds. The Boston Globe just started a teen publication called Boston Teens in Print, or TiP, which is written by teens.

In Philadelphia, I notice that the two major newspapers, the Philadelphia Inquirer and Philadelphia Daily News, rarely print op-eds by young writers. On average, they seem to run two or three op-eds a year by people under 21. Even for issues concerning young people, the op-eds almost always are by people in their 40s and 50s. Nationally, almost every syndicated columnist is over 30.

When I started teaching the editorial writing class at Temple in 2003, I had low expectations. I expected the students' op-eds to have the depth and complexity of a saltine cracker. I was pleasantly surprised by the quality of writing. I was exposed to subjects not covered much in the mainstream press, such as the tough job market for graduates, university admissions policies, heroin abuse in the suburbs, and voter apathy among college students.

Many of the papers gave fresh insights on local, national, and international issues. For each of my seven writing assignments, I would receive several articles that were good enough to run in major newspapers. During the semester, six of my students had their op-eds published. My experience convinced me that there are many talented young writers who should be harvested by newspaper editors.

If newspapers want younger people to read their papers, op-ed editors should actively reach out to college journalism programs and try to develop voices that have the perspective of younger people. One approach would be to have several editors of local college newspapers act as regular op-ed contributors.

Newspapers also need to focus more on issues that young people are concerned about. For instance, high school students are well-equipped to talk about student loans, school shootings, binge drinking, and substance abuse.

It's important to engage young people in newspaper reading since they will be the next thinkers, leaders, and voters. Also, there is a great difference between the quick information you can get on the Internet and television and the in-depth articles you read in the newspaper.

If newspapers can address relevant topics and include younger voices, it's possible that young people might conclude that newspapers aren't just for their parents and grandparents.

· Larry Atkins teaches journalism at Arcadia University and Temple University.

The Talent: A Terrible Thing to Waste

The Talent: A Terrible Thing to Waste
by Rob Fitzgerald

In the last two months, I've had the opportunity to judge a media plan of the year competition for professionals and a creative media advertising competition for students in the Northeast. That there were worthy winners in both competitions was no surprise. Far more surprising was the contrast in the overall standard of entries between the two groups, and what it says about the current and future state of our business.

I was encouraged to find one of the competitions full of ideas, enthusiasm and a real passion for our business. Then, there were the professional entries - more than 300 of them, and dominated by old ways of thinking. I lost count of the number of times I read the phrase "teaser to create excitement." These so-called 'media' strategies were obviously driven by some whim of the creative department, without any measures or understanding of the effort's effectiveness and reflecting an overall lack of energy and pride of ownership that would make them jump off the page.

Since the professional entries were mostly written by people with at least five years or more experience, I had to wonder: What is the industry is doing to people that takes the talent, potential and enthusiasm from eager students and then wrings it out of them once they've entered the agency world?

I ask this question particularly of the business in the United States. I have participated in industry awards and training on several continents, and in general have found that after five years of experience, the enthusiasm of junior staff has been heightened rather than dampened and suppressed.

The answer does not lie in the much-discussed ability of our industry to attract good people. The increasing importance of media and media companies in communications and marketing is now well-documented and anyone recruiting will clearly see we are no longer 'third tier' recruiters of junior marketing talent.

Rather it comes from what we do with that talent once we have attracted it.

In many other countries, lack of resources means staff (especially junior staff) are required to multi-task across the disciplines of research, planning and buying. They are also given greater exposure to clients at a senior level and, in turn, clients are more supportive of fledgling talent that brings them new ideas and fresh insights. As a result, junior staff's roles and responsibilities are broad, they have a real sense of ownership and contribution to their clients' business and their jobs remain challenging and stimulating.

How many of us can say the same about the majority of mid-level staff we meet? The fault is not their own. The size and scale of the business in the United States is such that it has bred a level of specialization that is unique. Beyond the separation of media specialists and the division of the research, planning and buying functions, we have added new levels: network buyers, spot buying specialists, competitive reporting and consumer insights specialists, channel planners, etc.

The result is that to even reach the supervisory level, many staff have had to go through years of repetitive, highly specialized work usually focused internally on purely one aspect of a client's media activity, making ever more incremental (and often hypothetical!) improvements to implementational plans, rather than working externally with clients to learn about and contribute to what really driving a client's business.

All this when changes in the communication business increasingly demands generalists - people at every level who are able to navigate clients across multiple platforms and disciplines.

It is an undocumented truth among most senior management of today's leading media companies that we all got better as we got more senior, and moved away from individual disciplines onto a broader playing field. But we mostly did it at a time when that happened much earlier in our careers than today's generation.

I've seen the talent out there, even in just the Northeast, who are as yet unspoiled by specialization. The next time a senior figure in the industry bemoans the lack of talent coming through the ranks it's worth asking: Would the new recruits have stayed around longer if they had not been asked to be the local spot buyer for Idaho for five years, or if their intro to the agency world had been something besides the 24/7 competitive reporting assistant of the agency?

Rob FitzGerald is senior vice president and managing director of Initiative East, based in New York. (

Tuesday, July 24, 2007

BoSacks Readers Speak Out: ABC, Reader's Digest, Bauer, and Printers

BoSacks Readers Speak Out: ABC, Reader's Digest, Bauer, and Printers

Re: Hachette Signs On With ABC Rapid Report

Bob, Here a little secret. The people who put together Rapid Report - have no idea how circulation works.

Every circulator that I know of, must make ratebase on every issue. Most who know that know how to work the levers, do make ratebase on every issue. If you have a soft newsstand returns - you lean on your sub starts. If you have a strong return flow on your newsstand - you push your starts out. To me, Rapid Report solves nothing.

When Jack says that Rapid Report gives greater transparency and accountability - I think he's off the mark. Rapid Report really only gives data on a 'work in progress'.

(Submitted by a Circulator)

Re: Move to 'e-paper' not a Hearst PI Plan

Hi Bo, I look forward to your reports every day (I am in the paper industry). I constantly feel that you are drumming this e-paper thing just a little too loud and often. Being in the paper biz i suppose I am prejudiced, but I see nothing very practical in this technology. It seems unwieldy and un-natural to me. Of course I am old (56) and despise slowly scrolling through downloaded page upon page to find what I want. Also I suspect that the plastics, films and electronics required to manufacture and run this amazing device will have an impact on the environment--must have some kind of foul battery technology as well.

I know millions are riding on the success of this, but I see what the forest and paper industries have invested as well in environmental improvements. Plus you probably can't wrap fish in an e-paper!

(Submitted by a Paper Person)

Re: Prostitution Is Legal

And the magazine industry can't figure out why our profession is in free-fall. I'd laugh myself silly if I didn't want to cry so bad.

(Submitted by a Publisher)

RE: In Touch, 'Hell's Kitchen'

Celebrity gawking magazines aside, I object to this TV show on the grounds that it gives my ancestral homeland, the neighborhood where I was born - Hell's Kitchen - a bad name. The people there ranged from blue collar, lower middle class to outright poor and lived in 5 room, walkup, railroad flats. And there is more than one professional second story man, several bootleggers, and a numbers runner in my family tree. But they had dignity, and most of these people are unfamiliar with the word let alone the behavior.

(Submitted by a Printer)

RE: Reader's Digest to Sell Back Cover

Extensive research in-house? Wait, let me guess:

"You think readers would mind having ads on the back cover?"

"I don't think so. Hey, why don't you ask Dave over there; he actually talked to one of the readers once."

"Wait, I know! Let's have a focus group!"

Why do I think that the research had more to do with figuring how much money there was in it?

(Submitted by a writer)

Re: Cocktail

Bob, The "uncertainty in the single copy market" is code for wholesalers finally saying enough is enough with low cover priced titles entering the market but not providing wholesalers with enough revenue to even cover their distribution costs. Titles like Women's World, First, Quick and Simple etc, which have low cover prices should provide wholesalers with subsidies in addition to margin to allow wholesalers to make a profit on low cover priced titles. There is no cheaper or more efficient distribution system than the one that is currently in place through traditional wholesalers. Publishers of low cover priced titles have been taking advantage of that system for too long by providing margin on copies sold only. These margins, because of the low cover prices don't even cover the wholesalers' costs.

(Submitted by a Distributor)

Re: Bauer Pulls the Plug on Cocktail Weekly - Adieu: Jane

You mean that 90% advertising and 10% meat isn't selling anymore. What a surprise, Vogue just tried to give me a years subscription with a tote bag thrown in for 12 bucks, no thanks.

(Submitted by a Paper Person)

RE: Saving the Magazine Business

Bob, The problem with publishing articles not of immediate or momentary interest is that there is no reason for the reader to read them right now and therefore no reason for the reader to buy this issue of your magazine. This has been a real problem at our magazine and at those of general interest magazine now long gone. Readers are so happy reading back issues that they don't keep their subscription current. At a focus group with expired subscribers one woman said she loved our magazine but did not have time to read all the issues. She let her sub lapse and was planning to read this year the issues she had not read in the previous year. The challenge, then, is to make sure your magazine is compelling and timely -- and still deliver lasting value.

(Submitted by a Publisher)

Re: Saving the Magazine Business

There is no way the present, mostly female management, can turn this thing around.

They are not only going to propel the demise of Readers Digest, but also their other titles.

Last month they dropped the name Reiman off their Greendale publishing company and have given it the name of RDA Milwaukee. A certain Mr. Falk made a public statement that the name Reiman was not a brand but the titles are. Where has this guy been? Not only are they going to sell more advertising in the flagship, which is sinking fast, they are preparing to sell advertising in Taste of Home and the other related titles. Reiman built its reputation on "NO COMMERCIAL ADVERTISING" in all their publications and successfully grew the business to over 15 million subscribers when RDA bought them. Now their subscriptions have dropped to around 13 million across 14 titles. Want to make more money, sell advertising. This will back fire like you will not believe, Reiman readers will not put up with advertising and will drop their subscriptions at a more rapid pace than the fancy ladies in Pleasantville will understand.

(Submitted by a Paper Person)

Re: Saving the Magazine Business

DeWitt Wallace, and later, Roy Reiman, understood that if you build something absolutely different---and focus like a laser on the reader, not advertisers or shareholders--you will succeed.

Most mainstream publishers pay lip service to this, but never practice it.

(Submitted by an Unknown)

Re: Saving the Magazine Business

I don't usually agree with Mr. Magazine, but

today, like you, I find myself saying "Hear,

hear!" If only there were people in our industry with functioning ears.

(Submitted by a Publisher)

Re: misinformation

Bob, It is interesting that there never seems to be an attachment of misinformation or disinformation in the printed media to the decline in circulation. Maybe the US reader is also more intelligent than the media gives them credit for and doesn't appreciate the pandering that goes on in the press.

(Submitted by an Unknown)

RE: Readers Response to a Response: Working With Your Printer

(This note is in responce to a sexist reader from the last Bosacks Reader's Speak Out)

Bo, I think we need a chat room. Might be kinda fun! Then we can rant and rave at each other without knowing whether or not we will be having lunch with the person next week. You may share my response to his response with the group, pass it along to your printer friend, or put it to rest. Thanks for letting me rant!

Well, I'm not a he, I'm a she. I've been in this business for 20 plus years; I have a degree in Journalism from one of the big 10 schools (I couldn't afford an Ivy league education); managed manufacturing and distribution budgets in excess of $60 million a year; and my manners are above reproach. Now, I don't have any official documentation to support that last claim, although I did marry one of my print sales reps, so I guess he didn't think I was too Attila-like. Then again, his marriage proposal probably had little to do with which fork I use to eat my salad.

As you know, this industry has changed over the years. Technology has allowed us to produce pages faster, improve quality and reduce costs. Publishers have taken on more responsibility for the production of their publication, while the Printers continue to automate processes for file submission to the point where human intervention is barely required. The lack of human intervention has begun to take hold in the Customer Service area.

Many publishing companies have taken the print buying responsibility from the Publisher and moved it to the Finance Department. (Try explaining to a CFO that buying print is not the same as buying a widget.) Of course we want a competitive price, but when I issue a Purchase Order to a Printer, I am entering into a partnership with the Printer. During the course of that partnership, we work together and "help" each other to produce the best print publication possible. And, if I screw up, I expect you to pick up the phone and tell me so, cause when you screw up, I will pick up the phone and tell you. So by the time the publication mails, you and I have produced an outstanding print product, as well as built a great relationship, and I don't have a mailbox full of accusatory emails.

That is what is gradually being lost, not in just the printing industry, but in every industry: You can't talk to a real person anymore. Many of the younger Customer Service people have spent half their life communicating via email, and they think that's a good vehicle for servicing their customers, but it isn't. Emails can be easily misinterpreted, and if you accidentally hit the Caps lock key, you could have a real problem on your hands. If you want to build relationships with your customers, and win their repeat business, you need to talk to them. But don't call them names, or they probably won't do any business with you regardless of the price.

(Submitted by a Publisher)

When cultures collide

When cultures collide
David Waller, PrintWeek, 12 July 2007

When Steve Case walked away from AOL Time Warner in 2003, he must have been scratching his head and wondering what went wrong.

Just three years previously he had engineered a brazen and headline-grabbing $166bn merger in which America Online, a darling of the boom, had absorbed media behemoth Time Warner. It was billed at the time as the 'biggest deal in history', the perfect marriage of old and new. Time Warner had the content, and Case's upstarts had the technology to take it forward. Yet the relationship soon hit the rocks. In 2002, shares in the new company dropped as much as 75%, and AOL Time Warner posted the largest annual loss in US history: $100bn, roughly the equivalent of Israel's GDP. And this was a deal that Ted Turner, the new company's vice chairman, had described at its inception as 'better than sex'.

Case's demise is an extreme example, but it's by no means unique. In the first three months of 2007, merger and acquisition (M&A) spend in the UK totalled £5bn. Last year, global M&A deals came near the £2 trillion mark, exceeding even the frenzied activity of 2000, when the runaway bandwagon was at full lick.

Acquisition fever
The print industry is no exception to this trend with headline-grabbing deals including Williams Lea's acquisition of The Stationery Office, French book group CPI picking up Fulmar and Pindar swooping to take control of struggling magazine printer Cooper Clegg.

The appeal is easy to understand: in an increasingly competitive market, the quickest way to consolidate your position and to raise your production capacity and cost efficiency, is to buy up your rivals.

Yet M&As are said to destroy shareholder value in more than half of cases. Their downfall can be attributed to any number of factors, from a poorly managed handover to an unforeseen change in market fortunes. If you're considering a merger or acquisition, the sagest piece of advice may actually be 'don't bother', especially when, as in the case of AOL Time Warner, the whole thing can be brought tumbling down by something as intrinsic yet intangible as company culture.

Looking back, it is easy to see why, for all the bluster, the AOL Time Warner merger was doomed to fail. Time Warner's executives were veterans of the old media world, seasoned in traditional business modes. Suddenly, in marched a bunch of young, brash computer heads, ready to take on the world.

The hard fact of the matter is that culture clash in M&A activity is virtually unavoidable. Any deal, successful or otherwise, can suffer from various problems of synergy, so anyone contemplating merger activity must keep in mind one core truth: it's much better to pick a partner or target that already has a largely compatible culture, than to charge in saying you'll rectify the issue later. "It is very important for both managing directors to ensure the companies have a synergy in ethos and personnel," says Paul Holohan, chief executive of Richmond Capital Partners, who ranks culture clash as the single biggest cause of failure in M&As. "If the company cultures are dramatically different, we would advise aborting the
acquisition. It really is that important."

Human cost
Too often, the management on both sides ignores the human issue, concentrating instead on covering their backs in legal and financial terms. They only think to look at human resources after serious problems arise. By then, of course, it's often too late. Differences in working culture can breed competition between employees and destructive attitudes of 'us against them'. Mergers can become threatening to some employees, with uncertainty breeding absenteeism, poor performance and an exodus of talent.

It's important to pinpoint exactly what is meant by the term 'culture clash'. This banner term should not just include matters of procedure, such as the compensation system or how to file expenses. The problem is actually far harder to identify. "Culture is really a company's values, beliefs and norms," says Phanish Puranam, assistant professor of strategic & international management at the London Business School. "These are rarely written down, yet they're widely accepted and understood. That's what makes it hard." Points of contention, he says, can include anything from which technology is best, to whether it's acceptable to ditch the tie on a Friday.

As a result, "both the acquiring and the acquired organisation should conduct a cultural audit," believes John Gillibrand of Unity Chartered Accountants. "They will then ascertain not only their own culture type but that of the acquired organisation. The audit will allow the parties to assess the 'goodness of fit' of the two organisations and to foresee possible barriers to the acquisition. It will also allow the parties to determine what elements in both cultures are worth retaining."

Hearts and minds
Once the deal has been done, problems can of course emerge in how the changeover is managed. Simply steaming in and imposing new rules on an existing company is bound to cause problems. Nothing is more important than winning the hearts and minds of all involved, by taking the best of both sides and incorporating them into a common culture. Deals are often derailed by a lack of such business basics as openness and integrity. Roles aren't clearly assigned, and everything seems to happen in the opposite way to how it was planned.

The experience of car giant Daimler-Benz's $36bn merger with Chrysler provides a salutary lesson. The 'merger of equals' quickly proved to be a massive misnomer, with Jürgen Schrempp, the German co-chief executive, actually admitting as much in an interview with the Financial Times, shortly after the deal was signed. Instead, he said, his company had acquired Chrysler.

Predictably, this didn't sit too well with the American employees. The partnership soon turned into a debacle of international bickering, jealousy and mistrust, a situation not helped by the fact that two American Chrysler bosses were sacked in the space of 19 months, and replaced by a German (a friend of Schrempp's, to boot). The partnership, which was doomed from the start, is now finally coming to an end, with Daimler in talks to sell the ailing US wing to private equity. Its lasting legacy: a glaring lesson in how not to conduct a merger.

David Waller is a section editor at leading business management title Management Today.

Culture clash is virtually unavoidable, but there are steps that can be taken, both before and after the deal, to ensure your M&A doesn't become another AOL Time Warner or DaimlerChrysler
· Select the right company. Culture is almost impossible to change, so check the potential partner's culture is similar to yours. How will the two fit together? Find out how the other company would handle a particular problem, and see how that squares with your own methods
· Conduct HR due diligence. Identify the key areas of cultural difference; where the new organisation will be positioned; any changes to be made to policies in the acquirer target; how long the process will take; and what resources will be needed for the change
· Be open. Tell people what to expect from the acquisition. Fear of change is a lot worse than knowing what's going to happen, so pre-empt any rumours by being open from the onset
· Support your line managers. These are the guys in the front line, but often know nothing more than their team. Let them know you trust them to make difficult decisions
· Create a united vision, and do it fast. When Hewlett-Packard acquired Compaq, it launched a two-week campaign to rid the company of Compaq-branded items, donating $80,000 worth of coffee cups and shirts to charity. Teams need a common goal to pull together
· Build networking opportunities. The chance to make new contacts makes it more personal and real for people. Give them the benefit of meeting like-minded fresh blood and getting a chance to learn
· Know who's doing what. Keep competition between employees and hostile feelings to a minimum by mixing employees as much as possible. And identify managers who'll be able to motivate employees after the deal
· Keep hold of your people. M&As often cause major staff turnover. Offer key people the proper incentives to stay
· And finally, the most important thing: be true to your stated values. Fail to do that and it will cause cynicism and mistrust. Show you've stuck to your values and people will accept other changes

Harry Potter and the Reading Phenomenon

BoSacks Speaks Out: As most of you know I track reading habits. I track newspapers, magazines, web sites and I also track trends. That would be reading trends. Most of the data viewed on the surface is not encouraging. But if you dig deep there is a lot going on that at first glance just doesn't meet the eye. Most stats show that reading and children is at an all time low. How then can you explain the Harry Potter experience? I think it is remarkable and joyous.

For the record last Friday night, I was on line at mid-night to get the last Harry Potter book. There were at least 1,200 people in a very small town in the Berkshire Mountains. Of those 1,200 my guesstimate was 800 kids under 16.

My thanks to J. K. Rowling for saving at least two perhaps three generations of real readers.

Disbelief in magic can force a poor soul into believing in government and business.
Tom Robbins (1936 - )

Harry Potter and the Reading Phenomenon
BY ANGIE GREEN,0,6429227.story?coll=dp-news-local-final

A survey says 51 percent of children didn't read for fun before the wizard's series.

As you read this newspaper, hundreds - maybe thousands - of Hampton Roads Harry Potter fans are burrowing into the final book about the fictional realm of wizardry that literally changed our social fabric.

To these loyal readers, it's been a tough wait to find out how it all ends.

"I feel connected to Harry," said 13-year-old Kwesi Haynes, trying to explain his fascination with the series. Haynes, like millions of global fans, had read all six books and planned to purchase the seventh this weekend.

But beyond the worldwide hype and cloak costumes of Harry Potter, how much have the books affected students' desire to read? The answer is a lot, according to a 2006 study released by an independent research company and the book's publisher, Scholastic.

The study, which was discussed by Scholastic officials Friday after the book's unveiling in New York, surveyed 500 children in 25 U.S. cities. It found that 51 percent said they hadn't read books for fun before they started reading Harry Potter.

That was the case for Kwesi, who once attended several special education classes, but now makes A and B grades in Newport News mainstream reading classes. He insists the Harry Potter books were his inspiration.

"I never liked reading when I was 11 years old," said Kwesi, who began reading the series at the encouragement of his grandfather, Hurbert L. Dickens.

Kwesi said he realized after he started reading Harry Potter that he would start to enjoy reading. Now Kwesi - much to his grandfather's delight - is almost finished with his sixth book for the summer.

The Scholastic-sponsored study also said that childrens' attitude toward literature in general has changed in the post-Potter world. Seventy-six percent of children surveyed said Harry Potter has made them interested in reading other books.

"It was the first big series that I had been read to as a child," said Graham Young, an incoming eighth-grader at Tabb Middle School in Yorktown. "It made me love reading."
"It's a springboard," said Viky Pedigo, who has worked as a media specialist with the Williamsburg-James City County Schools for more than 30 years.

"Any book that a child is really involved in is going to encourage them to read more books of that sort," Pedigo said. Cameron Blandford, an incoming seventh-grader at Trinity Lutheran School in Newport News, said the books got him started on a reading addiction that became so intense his parents joked that he had a "reading problem."

"We couldn't go anywhere without reading books," said his mother, Lori Blandford. She said her son was introduced to the first book three years ago and never stopped. "He's a hungry little reader."

Cameron, 12, is currently reading the Christian "Left Behind" series and plans to soon begin J.R.R. Tolkien's fantasy "The Lord of the Rings."

But there are also some Harry fans who said their love of literature has nothing to do with Harry Potter.

"I've always liked to read," said 12-year-old Alan Salimov, who will attend seventh grade at Norfolk Academy and who constantly reads adventure and fantasy books. "Anything that has a story, I'll read."

In fact, one avid reader said the Potter books were a bore and didn't get past book one.

"I didn't like reading them because it wasn't that interesting," said 10-year-old Meredith Young, who was turned off by all the talk of wizards and owls in the first chapter.

Still, the survey findings hold true for at least one Hampton Roads student who now reads a book instead of watching a movie.

"I am enjoying reading a lot more," said Kwesi. He plans to purchase the final Harry Potter book with his mother this weekend. "I wonder what's going to happen?"

Soon enough he will know.

Where have all the students gone?

Where have all the students gone?
By Frank Romano

July 13, 2007 -- Fact: the printing industry needs 60,000 new employees every year to replace those who leave the workforce, for whatever reason. Where do replacement workers (new hires) come from? About half come from other printing companies because it is far easier to hire someone who already has the required skills than expend the time and cost of training someone from scratch.

The other half come mostly from schools. About thirty percent come from high schools and fifteen percent from 2-year and 4-year colleges. The last five percent come from trade or manufacturer schools and other sources.

Some companies have exceptional training programs. On a visit to Quad Graphics facilities a few years ago, I was impressed with every worker I met -- many of them having come to Quad right out of high school. But Quad also recruits college graduates to bring new thinking and new ideas to their company.

For the most part, high school kids do not want to be printers. Printing rates just above fast food and just below farming in the minds of high schoolers. Thus, they do not enter the industry and they do not pursue printing at the college level. At one time we graduated over 4,000 Bachelor's and Master's degree students; today it is under 1,000.

The problem began around 1990, when high school administrators converted graphic arts programs that used offset duplicators to desktop publishing with PCs. High school students were no longer "touched" by printing. They spent more time creating logos and art. From that point, enrollment in college printing programs declined and enrollment in college design programs increased. There are 18,000 graphic design majors in 152 four-year programs conferring BA and BFA degrees with 3,500 graduated annually (NASAD). Count 2-year degrees and the number could be as high as 40,000. There are only jobs for seven of them.

On the other hand, almost every graduate of college printing programs has a job or job offer.

A few years ago, a well-intentioned effort was mounted by one of the industry associations to get high schoolers interested in printing as a career. Posters and brochures were created for high school guidance counselors. It described great jobs like estimator and planner. Give me a break. No high schooler, even a nerd, says "I want to be an estimator when I grow up." The committees that create this material just do not understand what motivates teenagers. Few groups have ever used focus groups and actually talked to students.

They have not even focused on the kids who work on high school newspapers and yearbooks. At least, these kids have been "touched" by printing

Without teens opting for printing at the college level, we will suffer as an industry. Many of the printers who installed digital printing have done so with the involvement of college grads, because that is where they learned the basics of the technology. New workflows require graduates with IT and problem-solving skills. The integration of the Web into every facet of our business demands new skills.

No one manufacturer dominates the industry or ever will; no one workflow or system dominates or ever will. Printers must work with different equipment and software, blending traditional and digital skills. Print is high tech, exciting, and challenging. Yet, this message is not communicated.

Mike Stern, an RIT grad, comes back every year to recruit for Brown Printing. He shows videos of robotics and electronic workflows. Japs-Olsen, now becoming a nationwide printer, recruits at colleges regularly.

Annette Wolf Bensen works with high schools in the New York area, with little support from industry associations. She is one of a small band of people who realize that the future of the graphic arts begins at the high school. Where are the other student ambassadors who go back to the high schools to tell high schoolers about printing? Who would fund them? Our trade associations have millions of dollars in scholarship funds and are parsimonious when it comes to supporting the very foundation of our industry. Most scholarships are puny compared with the cost of a college education. We need to give fewer but larger scholarships -- no, we need to give more and larger scholarships.

For years, money poured into the New England Printing and Publishing Council for printing scholarships, now with $1.6 million in the bank. Yet, most of the scholarships go to graphic design students. I love graphic designers. But it is like the scientist who cloned rabbits - why? They do a good job reproducing on their own, and so do designers. I know that we need college-educated printers and we need them now.

Our industry is a patchwork of local and national associations, big and small schools, committees, media organizations, printing companies, suppliers, and individuals. If we could only get some of them to create a priority list and then focus on results, we could make a difference. We could start with printers who have hired high school and college graduates and then get those workers to visit local schools so that kids hear from their peers. The material they use should be cool - a kid's cool, not a middle-aged business executive's cool. It would not cost much but it could bring our industry to the attention of kids. They do grow. And, with them, so will our industry.

Where have all the students gone? Part deux

By Frank Romano

July 20, 2007 -- I have been overwhelmed with the response to the last column on attracting new people to printing. You are all so articulate and passionate -- I am proud to be a part of the industry that you represent. I have heard from students, graduates, teachers, company owners, pressmen, industry suppliers, association reps, retirees, friends old and new, and others. There was one that said "my father took me to one of your presentations in 1974."

Some editing of your replies was done for brevity and WTT has agreed to run many of them. Almost all of you agreed with the premise of the article, but a few were like this -- "the fact remains that it's just not a very exciting industry and it doesn't pay very well" and "they have wised up and sought jobs with a better future." Fortunately this attitude was expressed by only two out of over 100 replies.

Someone caught me on my "only seven jobs open for graphic designers." But I quote one of the repliers, a recent graduate: "My graphic designer friends don't have jobs yet. All my printing friends are either on co-op or had jobs within a few weeks of graduation.

The printing industry is in the top ten of industries that have donated the most for scholarships. The design industry is almost at the bottom. Let the design industry take care of design students, and let the printing industry take care of printing students.

There were a few replies that are not presented. They were too specific about organizations or programs. In general, they claimed that some who control scholarship money do not promote well and waste money on bureaucracy. We do know that some of the best scholarships are administered by volunteers (with professional financial advice) -- the Bookbuilders of Boston does a superb job. I was at their 70th anniversary banquet recently and spoke to scholarship recipients past and present. EDSF gives away most of the money it receives and brings recipients to its annual meeting to meet their benefactors.

Some repliers bemoaned the competing groups -- the Graphic Arts Education and Research Foundation under NPES, the Print and Graphics Scholarship Foundation under PIA/GATF, the Print Council, the Electronic Document Systems Foundation, other national and regional associations, academic scholarship funds, supplier scholarships, and private donations. Heidelberg's Larry Kroll said it best "In short, no one company, organization or individual can solve the graphic arts talent shortage alone. We need an organized, cooperative initiative that transcends the special interests of the participants, and focuses on the preparation of our next generation graphic arts workforce."

The printing industry is in the top ten of industries that have donated the most for scholarships. The design industry is almost at the bottom. Let the design industry take care of design students, and let the printing industry take care of printing students. If a graphic designer wants a printing degree, I will be the first to contribute. But, to use printing industry funds to support anything other than printing is not right. If there are not enough applicants, make the scholarship amount higher. I would rather see quality rather than quantity. I know a young person who works for a small printer on Cape Cod. He would love to go to college but has no money. Here is someone who would be a great contributor to the industry but the miniscule amount of monies given would not cover the cost. If we gave money only to those who focused on printing and more of it, we could make a great start to filling the ranks of new hires with the workforce of the future.

Many of you volunteered to be student ambassadors or help in other ways. I would love to point you at organizations who would put you to work -- but there aren't any. I think the industry has to get its house in order first.

With all the groups involved, why hasn't the following been done?

A single website that summarizes all the scholarships available, with rules and forms. Call it "" and link it to everything, but make it so that everything the student needs is in one place. There would be a calendar showing application deadlines fro each scholarship and even information about the printing industry. The web address would be promoted to every high school counselor, teacher, and student. It would be cheap, effective, and reach students where they live -- online. I am certain that companies would step up to fund it and host it gratis. It can be done immediately. Let's put politics aside and accomplish this one step.

One small step for students, one giant leap for the printing industry.

Here are the replies and I thank for allowing me to give you the full effect of what the industry thinks in its own words:

Wholesalers are not dying . . . they are committing suicide

Wholesalers are not dying . . . they are committing suicide
By Samir Husni

I just came back from my usual weekly magazine purchasing tour in Memphis, TN. I bought 105 magazines and spend over $500.00. The price of the magazines ranged from $1.59 to $19.95. Some were $1.99, some were $2.99 and some were $5.99. Different prices for different magazines. The average cover price for a new magazine last year was over $6.50.

Why the lengthy introduction? Very simple. The media lately has been filled with news that magazine wholesalers are pushing publishers of low priced magazines to cut draw and raise the price of their magazines. Some say that wholesalers cannot make any money on any magazine priced less than $2.50. In fact this week Mediaweek carried an article (read it here) by Lucia Moses titled "Wholesalers Pressure Magazine Publishers to Up Cover Prices, Cut Draw." John Harrington's The New Single Copy editor repeated the findings of a study sponsored by Magazine Information Network. The study "reported that it was not possible for wholesalers to earn a profit on publications, no matter what the sale or retail sell-through percentage, on publications with prices of $2.50 or under." The study drew a sharp response from Michael Duloc President and CEO of Kable Distribution Services, a national distribution company. His response to the MagNet study (and John Harrington), published in The New Single Copy this week states, "Relating to your (John's) recent comments on this subject, your viewpoint, in our estimation, continues to be very slanted. It would appear that the major wholesalers (or perhaps another weekly celebrity publisher) are contributing beyond normal subscription rates to keep the issue of lower cover price, yet highly efficient titles on the radar screen. The question is, where would wholesalers be without this additional $450 million in annual retail sales? From your writings, one would quickly assume better off. I'd like to see audited numbers, versus the fuzzy number which have been used to substantiate this claim."

It is amazing that the only publisher who revived single handedly the single copy sales, and I mean Bauer Publications, is now forced to kill what would have been their fourth weekly because of the "single copy market climate." In the good old days, and in most of the world, magazines that sell are rewarded with better placement and good publicity. The wholesalers in their recent attempt to force Bauer to increase the cover prices of their magazines, and those of the rest of the publishers of low cover priced magazines, is gasping for their last breath of air. Those low priced magazines are needed to bring the traffic to the newsstands and to maintain the unit sales of their "bread and butter." What type of logic is this that bites the hand that feeds you? It does not take a researcher or a Ph.D. (although I claim to be one and do have a Ph.D.) to see the flow in the wholesalers logic. They are digging their own grave and they are digging it deep. When you hear people say that the wholesalers are in trouble, check and see if the trouble is from their own making. Wholesalers are not dying in this country, they are committing suicide. They have buried their head so deep in the sand that they can't differentiate between friend and foe.

As a matter of fact, do you know that four of the top ten revenue-generating magazines on the newsstands are Bauer magazines and are all priced under $2.00. If they, as publishers, can survive and make money from this single-copy driven model of publishing (unlike many other advertising driven publishing models), I cannot see or understand how the wholesalers cannot make any money unless the price is over $2.50. Wholesalers deliver magazines as a whole (in boxes) and not by single units and titles, and the average cover price of all magazines distributed (old and new) is almost $4.95. The magazine distribution channel is indeed broken, but the low-priced magazines that they are selling are not the cause of the problem. In fact if wholesalers do not want to commit suicide they need to force other publishers to lower the single copy prices of other magazines to be equal or close to that of the subscription prices.

I cannot believe that they see fault with a magazine that sells at $1.99 and has almost a similar price for subscription, but they do not see fault with a magazine that sells for $5.95 on the newsstand but sells for less than 50 cents by subscription. It is a world gone mad. By the way, none of the covers shown above are from Bauer. I just wanted to show the proliferation of the low-priced magazines besides Bauer. They include respectively Meredith, HFM, Time Inc., Penny Press and Hearst. If those publishers did not see the wisdom of the low-priced single copy sales in reviving the single copy marketplace, a practice that Bauer has adopted since its inception as a company in this country in 1981, I do not know why they are doing it then! I am not going to second guess Bauer and their decision of not publishing Cocktail Weekly, but I am going to continue to give them credit for saving America's newsstands, and the wholesalers, from a sure death. They maybe the only company that can help bring the wholesalers from the brink of death. Time for the wholesalers to hit the brakes and rethink their collective stand against the low-priced magazines. Rethink now!

Young keep it simple in high-tech world: survey

Young keep it simple in high-tech world: survey
Tue Jul 24, 2007 11:05AM EDT
LONDON (Reuters) - While young people embrace the Web with real or virtual friends and their cell phone is never far away, relatively few like technology and those that do tend to be in Brazil, India and China, according to a survey.

Only a handful think of technology as a concept, and just 16 percent use terms like "social networking", said two combined surveys covering 8- to 24-year-olds published on Tuesday by Microsoft and Viacom units MTV Networks and Nickelodeon.

"Young people don't see "tech" as a separate entity - it's an organic part of their lives," said Andrew Davidson, vice president of MTV's VBS International Insight unit.

"Talking to them about the role of technology in their lifestyle would be like talking to kids in the 1980s about the role the park swing or the telephone played in their social lives -- it's invisible."

The surveys involved 18,000 young people in 16 countries including the UK, U.S., China, Japan, Canada and Mexico.

Terms most frequently used by the young when talking about technology related to accessing content for free, notably "download and "burn".

The surveyors found the average Chinese computer user has 37 online friends they have never met, Indian youth are most likely to see cell phones as a status symbol, while one-in-three UK and U.S. teenagers say they cannot live without games consoles.

"The way each technology is adopted and adapted throughout the world depends as much on local cultural and social factors as on the technology itself," said Davidson.

For example, the key digital device for Japan's young is the cell phone because of the privacy and portability it offers those who live in small homes with limited privacy.

They found Japanese children aged eight to 14 have only one online friend they have not met, compared to a global average of five. Some 93 percent of Chinese computer users aged 8-14 have more than one friend online they have never met.

Davidson said this was encouraging those aged 8-14 in China to select online over television -- a trend not seen in any other market in that age group.

The changes in how the youth market engages with technology is keenly followed by advertisers and content firms.

"Traditional youth marketing considered opinion formers and influencers to be a small elite, but these days the elite has become much larger," said Davidson.

For parents worried about what their children are getting up to amid the wave of gadgets, little has changed in a generation.

The surveyors found the most popular activities the under-14s enjoy were watching TV, listening to music and being with friends. The rankings for those older was similar although listening to music was top.

Monday, July 23, 2007

Helping Small Publishers Overcome Challenges of Web Publishing

Helping Small Publishers Overcome Challenges of Web Publishing
Godengo Sets Up Ad Network, Content Management Tools for Niche Titles
By Abbey Klaassen

NEW YORK ( -- It's hard to ignore the rapid growth of the online advertising space, but for many traditional media publishers going online is a major investment that calls for overhauling content management systems and coordinating ad servers. It's especially daunting for smaller, locally focused publications that may not see the immediate returns on the cost of upgrading their web operations.

One web entrepreneur is betting on that conflict.

Untapped market
Tim Sullivan launched his company, Godengo, a little more than two years ago, after running a web-hosting outfit on the bet that there were more clients like "Palm Springs Life," a small Florida magazine that had come to him on a web-development consulting product. The magazine was, he felt, representative of an untapped market, local magazines, which had been growing rapidly. Since then, he has sold his web software to pubs like San Diego Magazine and Rhode Island Monthly and has launched an ad network that sells inventory across more than 92 titles. His newest client is Tribune Co.'s Chicago magazine.

"When we looked at city and regional magazine space we saw high-quality publications that were doing well in print but were falling behind online compared to daily local newspapers," he said. "They just hadn't focused on it."

They weren't fluent in search-engine optimization, which was keeping their content from being found. Another problem, said Bill Oates, general manager of, is there's no easy way to convert content from page layouts to the web -- and building a system from scratch isn't doable for many city and regional magazines. And the local advertising market -- which supplies almost all of the ad revenue for most of these magazines -- hadn't yet exploded onto the web in the way the classified market had for newspapers.

One size fits all
Mr. Sullivan's Emeryville, Calif.-based Godengo provides an economical solution: a fairly one-size-fits-all content-management system and web design model that is optimized for things like web search. He claims the magazine sites using it often double or triple their traffic within six months.

The company charges an implementation fee and a monthly license fee and offers a la carte services on top of that. He said some of the deals have been structured as revenue shares as well; the network is on a pure revenue-sharing model. While he won't say exactly what revenues are, he claims 2007 will be a "seven-figure year."

There's a definite similarity to the modular look of the sites using Godengo's services. Mr. Sullivan argued that the publications all focus on different markets, so the sameness is less of a concern, and said he would never sell his site-development services to two publications in the same market. In the case of, Mr. Oates said they made modifications to the Godengo design after many discussions about how they wanted it to look. "We made a real concerted effort to have a distinctive look," he said.

He said his magazine has begun to participate in the online ad network, but said it's too early to say whether it will be material.

Delivering scale
The network helps bring to national advertisers what the individual sites on their own lack: scale. Despite online advertising's promise to deliver niche, long tail targeting capabilities, it's a well-documented fact that in the end scale still matters (in many cases, the most) to the national brand advertisers looking to pour money into the space. Godengo sells the ads, but the magazines can choose to fulfill the impressions on a case by case basis.

"We needed to be sure we weren't cutting our own throats with a national advertiser," said Bill Oakes, general manager of He surmises his title receives a larger share of national ad dollars than most city and regional magazines, thanks to its size. On the flip side, he said, "if we have a Chicago magazine advertiser looking for more national ads we can offer that up and get a split of the revenue."

While the network is small by comparison standards, with 2.5 million monthly unique visitors, it is affluent, Mr. Sullivan said. He claims that more than 44% of the visitors have household incomes of $100,000 or higher and 10% fall into the $200,000-plus category. He maintains that they tend to skew a little younger than in print and most of them are not current subscribers.

Jim Dowden, executive director of the City and Regional Magazine Association, said locally focused magazines need to go after some national ad dollars. His association is a proponent of Godengo.

"It's a natural, you need to go after national and the people who are pressing that are going to be national buyers and so you need a natural presence and the technology to make that work," he said.

Wholesalers Pressure Magazine Publishers to Up Cover Prices, Cut Draw

Wholesalers Pressure Magazine Publishers to Up Cover Prices, Cut Draw
by Lucia Moses

Prompted by rising delivery costs and pressure to grow profits, leading magazine wholesalers are making unprecedented steep distribution cuts across all magazines, with a sharp focus on their least-profitable ones, those with a $2.50-and-under cover price. The News Group and Source Interlink Cos. have made significant cuts since May 1, following a similar move by Anderson News Corp., which sources said cut 140 million copies in a six-month test begun last fall (about 17.5 percent of the estimated 800 million Anderson distributes annually). Source Interlink cut 57 million copies (5.7 percent of the 1 billion copies a year it distributes) as part of an effort to get its sell-through rate to 48 percent from 34 percent. At The News Group, president John Seebach said unspecified cuts were aimed at increasing sell-through to more than 40 percent from 37 percent this year.

In particular, wholesalers are zoning in on proliferating low-priced magazines, like Meredith Corp.'s Family Circle ($1.99), Hearst Magazines' Quick & Simple ($1.59) and all of Bauer Publishing's titles, which include In Touch and Woman's World.

The number of low-cost titles has grown in recent years; titles costing under $2 represent more than 19 percent of all retail units up from 15 percent in 2005, according to a recent report by Harrington Associates. Bauer, the king of the low-priced titles, is arguably the biggest reason for that increase. In the second half of '06, its 1.3 million-circ In Touch and 752,936-circ Life & Style celebrity weeklies contributed nearly 2 million in newsstand sales.

Bauer already pays The News Group an incentive to distribute its titles, and the wholesaler is negotiating for more compensation from the publisher, Seebach said. Sources agree wholesaler pressure was a major reason Bauer scrapped plans to launch Cocktail Weekly, a women's lifestyle title that would have been priced at $2.49. (Bauer wouldn't comment for this story.) "Definitely, there has to be a change in the compensation wholesalers get from Bauer," Seebach said. "The Bauer line has been growing and has become a bigger part of wholesalers' economics. We just can't ignore it any longer."

Wholesalers are eyeing another lever: cover price. Hearst's Quick & Simple already raised its price to $1.59 from $1.49 in the fourth quarter of 2006, and is considering a price increase for the near future, although a representative said the increase wasn't done to appease wholesalers. "While we are sensitive to wholesaler needs, our cover price increases are based solely on consumer demand," the rep said. Another, Northern & Shell celeb weekly OK!, raised its cover price to $2.99 from $1.99 this year. And Bauer has tested a $2.19 cover price for In Touch in New England, sources said.

Some publishers have been accepting of the draw cuts by Anderson. David Ball, vp, Meredith consumer marketing, said sales of Family Circle fell off by a "small amount" following the cut, but praised the process. "We were concerned it would be an across-the-board cut, but it was done pretty strategically," he said.

David Leckey, executive vp, consumer marketing, American Media Inc., and an Audit Bureau of Circulations board member, said the ongoing draw cuts will hurt newsstand sales, while accelerating postal rate increases will make it more costly to grow subscriptions, forcing publishers to reevaluate their rate bases. "These are two things that will come to a head next year," he said.

As for the low-cost, newsstand-focused titles introduced in recent years, several have already folded, including Hachette Filipacchi Media's For Me and Gemstar-TV Guide's Inside TV. The remainder may have to make costly changes to survive. Newsstand analyst John Harrington, publisher of The New Single-Copy Newsletter, predicted as much in his report, which concluded that the titles threaten the financial health of the distribution channel and especially the wholesalers. They can't make a profit on magazines under $2.49 (wholesalers get a percent of the cover price of each magazine they sell, a disincentive for them to carry low-priced magazines). For the low cover price model to be viable, publishers will have to offer wholesalers higher discounts or handling fees or face limits in the range of distribution wholesalers provide, Harrington found.

For Bauer, whose business is built on the low-priced model, the stakes are especially high. A $2.19 cover price isn't high enough for Source, which is leaning on the company to test a $2.25 price in Los Angeles. "They do have the volume and they do have efficiency," said James Gillis, co-CEO, Source. "If we could get them to $2.25, $2.50, we would get over the $3.00 threshhold. And they've been receptive to that." A price hike will likely cause at least some sales falloff, although at $2.50, the Bauer celebrity titles would still be a bargain compared with Us Weekly and Star at $3.49 and People at $3.99. "Bauer has made that low price a marketing ploy," Harrington said. "If people are used to seeing a starburst that says $1.99 and the next week you don't see it or it says $2.99, it's going to impact it. Their alternative is either to sell subscriptions or get more advertising."

Wholesalers cutting draws for low-priced newsstand titles

Wholesalers in Canada and the U.S. are cutting back draws for the proliferating number of low-priced magazines, according to a story in MediaWeek. The goal is to increase sell-through and therefore profitability on the titles, which tend to be found at grocery store checkouts and are priced at less than US$2.50.

The News Group and Source Interlink Cos. have made significant cuts since May 1, following a similar move by Anderson News Corp., which sources said cut 140 million copies in a six-month test begun last fall (about 17.5 percent of the estimated 800 million Anderson distributes annually). Source Interlink cut 57 million copies (5.7 percent of the 1 billion copies a year it distributes) as part of an effort to get its sell-through rate to 48 percent from 34 percent. At The News Group, president John Seebach said unspecified cuts were aimed at increasing sell-through to more than 40 percent from 37 percent this year.

In particular, wholesalers are zoning in on proliferating low-priced magazines, like Meredith Corp.'s Family Circle ($1.99), Hearst Magazines' Quick & Simple ($1.59) and all of Bauer Publishing's titles, which include In Touch and Woman's World.
Bauer wouldn't comment, but rumour has it that it scratched the launch of Cocktail Weekly, which was to sell for US$2.49, because of the cutbacks. The publisher -- which has built its business on cut-price titles -- had already been paying a premium to wholesalers to handle its magazines.

Potter makes history as fastest-selling book

Potter makes history as fastest-selling book
By Mike Collett-White

LONDON (Reuters) - The seventh and final volume in the Harry Potter series has become the fastest selling book in history, publishers said on Monday, with more than 11 million copies sold during the first 24 hours in three markets alone.

U.S. sales of the eagerly awaited "Harry Potter and the Deathly Hallows" hit 8.3 million, comfortably beating the previous Potter installment, which posted sales of 6.9 million copies in the first day, U.S. publisher Scholastic announced.

In Britain, Bloomsbury sold a record 2.7 million copies of the final Potter book in the first 24 hours, up from 2.0 million for "Harry Potter and the Half-Blood Prince".

The same company also announced nearly 400,000 copies of the English language edition of J.K. Rowling's story were bought in Germany over the same period.

Thousands of Potter fans queued outside book stores in major cities around the world over the weekend to get hold of the book, which answers the questions on every reader's lips -- 'Who dies at the end?' and in particular, 'Does Harry survive?'

In India, police said on Monday they seized hundreds of pirated copies of the cover of "Deathly Hallows" after raiding a printing press, storage depot and private home in Bangalore.

Internet versions of the book also surfaced last week and two U.S. newspapers ran reviews before publication, but it was not enough to dampen enthusiasm for the last chapter of the boy wizard's increasingly bloody fight against the forces of evil.

Lisa Holton, president of Scholastic Trade and Book Fairs, likened the weekend excitement in the United States to the hysteria that greeted the Beatles' first visit to the country.

"This weekend kids and adults alike are sitting on buses, in the park, on airplanes and in restaurants reading 'Harry Potter and the Deathly Hallows'," she said in a statement.

Barnes & Noble Inc., the world's largest book retailer, sold 1.8 million copies of "Deathly Hallows" in the first 48 hours, while Borders Group Inc. sold around 1.2 million worldwide in a single day, both records for the outlets.

"This isn't the end of Harry Potter by any means," said Steve Riggio, CEO of Barnes & Noble. "Barnes & Noble expects to sell millions of Harry Potter books over the next few years."


Reviews of "Deathly Hallows" have been almost universally glowing, noting the darker tone of book seven in which several characters die. Critical reaction to the previous six Potter tales, which sold 325 million copies worldwide, has been mixed.

Rowling, 41, is likely to see her fortune swell further over the coming years. She is estimated to be worth 545 million pounds ($1.12 billion) already, making her the first dollar-billionaire author.

In addition to the books, the first five Hollywood adaptations of her Harry Potter stories have amassed around $4 billion at the global box office. The final film in the franchise is slated for release in 2010.

"After 608 crammed pages, it's still hard to believe it really is the end of the road for Harry," said Henry Sutton, books editor for the Daily Mirror tabloid in Britain.

He believes that the epilogue at the end of book seven means there is "no possible return" for the Harry Potter saga, although not everyone agrees.

Hours after the release of "Deathly Hallows", Ladbrokes bookmakers cut their odds on an eighth Potter tale to 10/1 from 16/1, following a flurry of bets.

© Reuters 2006. All rights reserved.