BoSacks Readers Speak Out: On Death Sprials? Jobs, Printers, and PR
www.bosacks.com
RE: Publisher - Printer Symbiosis or 'Death Spiral'?
Because I have spent the majority of my career as a publisher, and now more than a decade as a printer including publishing overlap - and all of that time in awe of and a "fan" of Benjamin Franklin - allow me to share an item of relevance to this conversation.
On Ben's tombstone, with all of the amazing credits he had to choose from, he left instructions to be buried as "Benjamin Franklin, Printer." But he used the term as it was generally understood then: it meant "publisher." In other words, printer and publisher were one and the same.
This might be an appropriate metaphor for Brown's "Death Spiral" warning. The two terms obviously became separated along the way; but maybe they are not that separate after all . . .
(Submitted by a Publisher)
RE: Publisher - Printer Symbiosis or 'Death Spiral'?
It is perhaps unfortunate that with printing, as with airline tickets, pricing levels are set by the stupidest competitor.
(Submitted by a Printer)
Re: Bo Sacks Launches Mag Consulting Firm
Mazel tov. I wish you and your partners satisfaction, success, and prosperity in your new endeavor, mediaIDEAS.
Although it seems counterintuitive, it is my belief that we entering a new golden age for magazines. It is perhaps unlikely that we will see the birth of another mass market, everybody-reads-it title like Life or Time or Readers Digest or US Weekly. (But who knows for sure?) On the other hand, entrepreneurial publishers will continue to launch smaller circulation titles (20M-80M) and many will succeed. And books that still fit the niche model while having circulations that are large but less-than-immense, i.e. The Economist, New York Magazine, Cooking With Paula Deen, etc. have a bright future.
As reader data become more available, and we learn to parse it, explain it, and sell with it, the value created by the editorial environment of the printed magazine will become increasingly obvious to advertisers eager to reach potential customers who are in a frame of mind to pay attention. The Jack Hanrahan piece you ran alongside the mediaIDEAS announcement speaks to this. Smart guy, that Mr. Hanrahan. In fact, he seems a natural ally for you and your partners because your customers and his will succeed together.
Just as no nation can tax itself into prosperity, no magazine can cost cut its way to success. It is a time to be bold. It is a time to invest in creative people with good ideas. Well run magazines that have passion and a point of view are part of the future.
(Submitted by a Printer)
Re: BoSacks Readers Speak Out: Jobs, Mags, and our Future
Bob, Your "loyal reader's" (below) comment reminded me of the experiences I have frequently had during the past few years with our magazine wholesalers and retailers. It led me to pick up an article in last week's Newsweek Magazine entitled "Era of the Super Cruncher". The gist of the article is that "expertise and intuition can be replaced by objective, data based decision making. Those who control and manipulate this data will be the masters of the new economic universe," according to the article.
This seems to tie in with "loyal reader's" statement that once he was a craftsman, now he is overhead.
The same could be said for newsstand distribution. Representatives of the publishers and national distributors used to rely on instinct, intuition, a study of past sales and like titles in categories and then work their business relationships with wholesalers who (at least the good ones) had long term ties to the communities and retail locations they serviced.
Now everything is managed remotely by people who have no ties to the retailers or the communities they service and the deliveries are, frequently, third party. There is no room for intuition, experience, salesmanship or even relationship building. The numbers are the numbers are the numbers (Of course, if you give us a little more discount and buy this promotion - which we won't guarantee full distribution on, we can change your numbers...). If this is progress, perhaps we should see what our sales efficiencies were before consolidation and after.
As a representative of smaller publishers, I can't change the distribution paradigm. I can believe in the Tooth Fairy and be all I want to be, but I can't change the paradigm. But I can and do work in and around it. I passionately believe that print and web and should work together and can sell each other - so, I just try to live in this brave new paradigm and hope the bean counters keep thinking I am worth keeping around.
(Submitted by a Newsstand Guy who was also recently reminded by upper senior executive level "my stocks worth more than yours" management that he, too, is overhead)
Re: BoSacks Readers Speak Out: Jobs, Mags, and our Future
In response to the "writer" who used to work for the Florida Times Union, I'm happy you are glad that you are now self employed. As a paper broker based in Jacksonville, Florida I stopped reading the FTU over five years ago. I will not even read their sports pages as it is by far the absolute worst paper published in the USA. I do subscribe and read the three newspapers that are delivered to my house each morning because they have CONTENT, something the FTU lacks. I'm really sorry for the folks that are out of work, but they should have also seen the writing on the wall . . .
(Submitted by a Paper Broker)
Re: And now, Grim Words from The Reaper
And some people also believe in Nostradamas' predictions. How many are on the list that haven't folded?
(Submitted by an Unknown)
Re: The Worst PR Debacle in History
I'm not saying that lead in toys is a good thing but if it's a real issue then shouldn't there would be hundreds of reports of lead poisoning from baby boomers who played with toys made in Japan and China from the 50's & 60's? Just thought I'd ask.
(Submitted by a Senior Production Manager)
RE: Envisioning the Next Chapter for Electronic Books
Bob, With Apple's release of iPod touch equipped with 802.11 b/g wi-fi, how much longer will it be before Apple launches iBook as a retail website instead of a computer? I usually listen to music while reading, I don't know if many others do too, but seems like a good combination to me.
(Submitted by a Corporate Director)
RE: BoSacks Speaks Out: New Research and Advisory Service for our Industry
Bob, Here's my take on the future of printed materials:
The publisher will need to target market their materials and get the consumer to pay for the content that they receive.
The printer will need to be able to manage the highly fragmented "list" by using a combination of digital and conventional print and custom personalization (mass customization).
The end result is a concert of email, direct mail & web based information that is useful to the consumer. The publisher and printer who figure out this recipe will be the only ones left standing at the end of the day.
(Submitted by a loyal reader/contributor and current man on the street)
Re: Media X: Life Story
AMEN brother! That's the first place I go to CNN. In regards to 9-11, I remember a whole group of us left the office in Burlington Ontario and went to a local restaurant and watched TV, the place was packed as other people were doing the same thing and there was not a noise coming from this restaurant as we all sat there with our faces turned to the TV and we sat in silence and occasionally we even heard a sob.
(Submitted by a Wholesaler Sales Manager)
Re: Media X: Life Story
I've spent most of my nearly 67 years teaching myself what to read and how
to read it. Sure, the Internet supplies a lot of garbage, but I don't have
to participate in the celebrity culture if I don't want to.
A big problem is illustrated by MoveOn.org shooting themselves in the foot
recently because they couldn't resist a lousy pun with "General Petraeus or
Betray Us". They are basically amateurs who didn't have an editor to tell
them why they shouldn't do that. And we're back to the subject of mentors
again . . .
(Submitted by a retired writer & editor)
Re: Boston Globe Media launches "Lola"
Love the Kinks reference - great song. If only the mag would be as long lasting!!
(Submitted by a Senior Publication Consultant)
Saturday, September 22, 2007
Advertisers to Circulators: We Need to Understand Your Business Model
Advertisers to Circulators: We Need to Understand Your Business Model
By Chandra Johnson-Greene
http://www.circman.com/viewmedia.asp?prmMID=3414
What do advertisers really think about verified circulation? Attendees of the "Advertiser Expectations and Perspectives in Advertising" session at yesterday's 2007 FMA Day in New York City got an earful from both sides of the debate.
Nicole Bowman, president of Bowman Circulation Marketing, moderated a panel that consisted of Steve Greenberger, executive vice president and media director, SLG Advertising; Rebecca McPheters, president, McPheters & Company; Ralph Monti, president/CEO, Special Interest Media, Inc.; and Harlan Schwartz, SVP and group account director, TargetCast tcm.
The panel based their discussion on a comparison between June 2007's ABC Publisher's Statements (only 77 percent of statements have been completed), which shows that verified circ represents 3.7 percent of the total circ reported, to June 2006, where verified circ had a 3.5 percent total.
Greenberger said he anticipated a more dramatic increase, but that publishers have been forced to be more conservative because verified circ has been "thrown under a magnifying glass."
Schwartz admitted that advertisers do use verified circ as just a "leveraging tool" in order to get the lowest prices for their clients.
"We did our circulation analysis, ripping them apart-every paragraph, every line item-to find a loophole, so that we could negotiate a better rate," he said, referring to a previous client he handled.
"That was the charge and the measure of success in the media buying unit. 'Can I nickel and dime a magazine to get a lower CPM?'-end of story. And if we were able to beat last year's price, I was successful, the agency was successful and they were compensated accordingly."
Schwartz added that the way the data is being reported is not the problem. "In my perspective, he said, "we just need to understand how you model your business growth."
McPheters noted that, regardless of how advertisers feel about verified circ, publishers would be forced to increase the use of it.
"The business model for all media is changing," she said. "Look at newspapers like The New York Times, which is making all of its [online] content free. Consumers are increasingly getting access to media that they don't have to pay for. If print is going to change what is a highly viable way of reaching consumers, then it is imperative that we're allowed to do that effectively. Therefore, we still expect verified to grow because we have to change if the environment around us changes."
McPheters added that advertisers, should in fact, pay more for public-place copies because they can reach an estimated 30-50 readers per copy.
The discussion quickly turned to the circulation business model itself and whether the 30-year call for a revision, as Schwartz described, could be easily established. He expressed that he'd like to see print switch to a CPM model that fluctuated by issue in the same way that TV and radio does.
"I would be frightened if we moved too quickly in that direction because there's no audience data to back up your pricing model if you went that way," Schwartz said. "No one has engagement in an apples-to-apples fashion, and we've been screaming for that for 30 years and there's still no resolution
By Chandra Johnson-Greene
http://www.circman.com/viewmedia.asp?prmMID=3414
What do advertisers really think about verified circulation? Attendees of the "Advertiser Expectations and Perspectives in Advertising" session at yesterday's 2007 FMA Day in New York City got an earful from both sides of the debate.
Nicole Bowman, president of Bowman Circulation Marketing, moderated a panel that consisted of Steve Greenberger, executive vice president and media director, SLG Advertising; Rebecca McPheters, president, McPheters & Company; Ralph Monti, president/CEO, Special Interest Media, Inc.; and Harlan Schwartz, SVP and group account director, TargetCast tcm.
The panel based their discussion on a comparison between June 2007's ABC Publisher's Statements (only 77 percent of statements have been completed), which shows that verified circ represents 3.7 percent of the total circ reported, to June 2006, where verified circ had a 3.5 percent total.
Greenberger said he anticipated a more dramatic increase, but that publishers have been forced to be more conservative because verified circ has been "thrown under a magnifying glass."
Schwartz admitted that advertisers do use verified circ as just a "leveraging tool" in order to get the lowest prices for their clients.
"We did our circulation analysis, ripping them apart-every paragraph, every line item-to find a loophole, so that we could negotiate a better rate," he said, referring to a previous client he handled.
"That was the charge and the measure of success in the media buying unit. 'Can I nickel and dime a magazine to get a lower CPM?'-end of story. And if we were able to beat last year's price, I was successful, the agency was successful and they were compensated accordingly."
Schwartz added that the way the data is being reported is not the problem. "In my perspective, he said, "we just need to understand how you model your business growth."
McPheters noted that, regardless of how advertisers feel about verified circ, publishers would be forced to increase the use of it.
"The business model for all media is changing," she said. "Look at newspapers like The New York Times, which is making all of its [online] content free. Consumers are increasingly getting access to media that they don't have to pay for. If print is going to change what is a highly viable way of reaching consumers, then it is imperative that we're allowed to do that effectively. Therefore, we still expect verified to grow because we have to change if the environment around us changes."
McPheters added that advertisers, should in fact, pay more for public-place copies because they can reach an estimated 30-50 readers per copy.
The discussion quickly turned to the circulation business model itself and whether the 30-year call for a revision, as Schwartz described, could be easily established. He expressed that he'd like to see print switch to a CPM model that fluctuated by issue in the same way that TV and radio does.
"I would be frightened if we moved too quickly in that direction because there's no audience data to back up your pricing model if you went that way," Schwartz said. "No one has engagement in an apples-to-apples fashion, and we've been screaming for that for 30 years and there's still no resolution
Ever Say "Stop the Presses" to the Printers of New York City
BoSacks Speaks Out: I suppose that this article will be a tad self-indulgent, but I lived and worked in New York City when it was exactly as Patrick projects in this story. I somehow knew at the time that it was a special, unique moment in transitory history. I felt then that it couldn't last. But it was mighty enjoyable while it did.
I would appreciate hearing from my long time associates about their recollections of this by gone, iconic era.
"History is the witness that testifies to the passing of time; it illumines reality, vitalizes memory, provides guidance in daily life, and brings us tidings of antiquity."
Marcus Tullius Cicero (Ancient Roman Lawyer, Writer, Scholar, Orator and Statesman, 106 BC-43 BC)
Never, Ever Say "Stop the Presses" to the Printers of New York City
By Patrick Henry, Executive Editor
http://members.whattheythink.com/evt/07/ge07/ge07henry3.cfm
September 19, 2007 -- As the former editor and publisher of a trade newspaper serving New York City's printing industry, I found much to remember and reflect upon in Jean-Marie Hershey's excellent post at PrintCEO.blog.com on the continuing disappearance of Manhattan's once-legendary printing districts. Having covered this story extensively as it unfolded over a period of many years, I'm reminded that New York's loss of stature as a print manufacturing center was indeed dramatic. I'm also awestruck, now as then, by the metro printing industry's capacity to outlast the very worst that market forces, time, and fate have conspired to heap upon it.
In the mid-1980s, when I began following the metro printing beat, lower Manhattan still was what it had been for decades prior to that: home to the largest concentration of printing businesses anywhere in the country. More than any other external factor, the realities of Manhattan's commercial real estate market gave the printing industry its special character and, unfortunately, its dangerous vulnerability to the slew of economic shocks that lay ahead.
The realities of Manhattan's commercial real estate market gave the printing industry its special character and its dangerous vulnerability to the economic shocks that lay ahead
The cramped nature of industrial properties in Manhattan - where almost no spacious, spread-out, single-story manufacturing buildings are to be found - made it difficult for printers to house prepress, postpress, and finishing departments alongside their pressrooms. As a result, the industry consisted mainly of "clusters" of printers and allied trade shops furnishing production services that the printers didn't have room to accommodate.
The Almighty Trinity
Many of these firms did their clustering in multi-story buildings throughout the district that Trinity Real Estate, the secular arm of historic Trinity Church and the printing industry's principal landlord, eventually christened "Hudson Square." Similar havens existed in Chelsea and on the far West Side - and, lest we forget, in Long Island City and a few other enclaves in the "outer boroughs" as well.
The clusters made sense, but for most of the firms inside them, operating a graphics business in New York City's printing districts was seldom less than a harsh daily struggle. Aggregating a multitude of busy, independent shops in one building might have been the next-best thing to vertical integration under one roof, but it could make sharing the building's single freight elevator a never-ending headache. Proximity to ad agencies, publishers, and other midtown customers was a plus, but anyone who has ever driven a car through the canyons of Manhattan in the middle of the day can picture what delivering a truckload of paper to any of these buildings was like.
Energy costs were punitive, as was the burden of the commercial rent tax. And, although many printers tried to downplay it, the imbalance between hourly rates for skilled printing help in New York City and wage scales elsewhere in the country made it difficult for metro shops to compete with outsiders on the all-important basis of price.
Yet somehow, these never-say-die entrepreneurs kept their doors open, their press time mostly booked, their employees paid, their customers happy, and their pugnacious chins up - until the grim event that suddenly called the viability of their entire industry into question.
The Day Everything Changed
I had just returned from the Print '01 show in Chicago when the aerial attacks of 9/11 all but paralyzed the sections of lower Manhattan where the bulk of the metro area's print community was concentrated. Some of these firms lost their space outright in evacuations brought on by air-quality concerns and other emergency conditions. Because, for weeks afterward, it simply wasn't possible to move about in the southern end of Manhattan island, even those who could stay in their premises were barred from producing corresponding amounts of work - an economic blow from which any printer, anywhere, would be extremely hard pressed to recover.
For weeks after 9/11, it simply wasn't possible to move about in the southern end of Manhattan island, and even those who could stay in their premises were barred from producing corresponding amounts of work
As we know, many printing tenants didn't recover, but even that tragic thinning of the ranks doesn't account for the reduced state in which the industry found itself once New York City had returned more or less to normal in the aftermath of the 9/11 attacks. By then, the factors noted by Jean-Marie and Dr. Joe Webb - soaring rents, out-of-state competition, and digital disintermediation, to say nothing of the stock market meltdown of 2000 - had already done their cruel work, as industrial censuses revealing the loss of hundreds of metro graphics businesses annually made painfully clear.
And while it would be easy to vilify Trinity Real Estate for doing what it did to jettison its lessees in the printing trades in the midst of all of this, it has to be acknowledged that many of these tenants would have succumbed anyway to other business pressures even if their landlord had wanted them to stay. Nor did printers get much help from the mayoral administrations of David Dinkins and Ed Koch, during which a series of changes to zoning regulations eliminated provisions that had protected printing buildings from being converted to non-industrial uses by their owners. The chic restaurants and the sleek luxury retailers we see in Manhattan districts once set aside for manufacturing are the legacy of those changes.
This You Call "Retention"?
In this writer's opinion, the City's contradictory policies on what it presumed to call "business retention" had as much to do with the diminishment of the printing industry as any action taken by the landlords. Among its feckless responses to the wave of conversions it had green-lighted with zoning handovers to the real estate interests were attempts to set up refuges for displaced printers in metro area backwaters such as Hunt's Point in the Bronx and the Brooklyn Army Terminal (a vast architectural relic from World War I) in that borough. Takers, predictably, were few.
Some in City government tried to be on the printers' side - for example, Alair Townsend, now the publishing director of Crain's New York Business, always listened sympathetically to them during her tenure as deputy mayor for finance and economic development in the Koch years. Print industry veterans Ira Brophy and Mark Baff also are warmly remembered for doing what they could as appointed liaisons to the print community.
It's also true that the City offered tax-advantaged industrial development bonds, relocation expense reimbursement, energy cost relief, and a few other forms of assistance to printers being squeezed to the limit by the hostility that the real estate market was now openly showing them. But, as Dr. Joe correctly notes in his response to the original post, this aid was reserved almost exclusively for those agreeing to uproot themselves from Manhattan's central business district and the Trinity enclaves where so many had done so much business for so long.
Remembrance and Celebration
The 9-11-07 publication date of the article in The New York Times cited by Jean-Marie is a pause-giving reminder that we have put only a handful of years between ourselves and the event that could have driven the metro area's much-battered printing industry over the brink of extinction - but didn't.
New York City still ranks among the nation's top five metropolitan area printing centers - not bad for a town that sometimes seems to have done everything to drive its printers away short of summoning the aid of an angel with a flaming sword
If, as Dr. Joe informs us, 885 commercial printers remain in Manhattan, that's a reason to celebrate the industry's amazing powers of endurance, not an excuse to lament the fact that it used to be bigger. That clustering continues to work is seen in the fact that PIA/GATF's Economic Research Department still ranks New York City among the nation's top five metropolitan area printing centers - not bad for a town that sometimes seems to have done everything to drive its printers away short of summoning the aid of an angel with a flaming sword.
Perhaps because it won't be long before I am one of them myself, I'm inclined to remember the things that the old-timers used to tell me about New York's printing industry in its heyday: that you couldn't enter a building south of 14th Street that didn't contain at least one printing business; that the rumble you felt as you walked along Hudson Street or Varick Street probably wasn't that of a passing subway train but of a web press running at full tilt.
That's the folklore, but on the night I learned that those flashes I would see bursting from the upper stories of darkened downtown buildings were the manmade lightning of camera departments in printing companies, I discovered a truth beyond refuting. New York City is and ever will be a printing town - even if things should again go from routinely bad to unimaginably worse as they did on the terrible day when we all found the true iron in the industry's indomitable soul.
Please offer your feedback to Patrick. He can be reached at pathenry@libordeath.com.
I would appreciate hearing from my long time associates about their recollections of this by gone, iconic era.
"History is the witness that testifies to the passing of time; it illumines reality, vitalizes memory, provides guidance in daily life, and brings us tidings of antiquity."
Marcus Tullius Cicero (Ancient Roman Lawyer, Writer, Scholar, Orator and Statesman, 106 BC-43 BC)
Never, Ever Say "Stop the Presses" to the Printers of New York City
By Patrick Henry, Executive Editor
http://members.whattheythink.com/evt/07/ge07/ge07henry3.cfm
September 19, 2007 -- As the former editor and publisher of a trade newspaper serving New York City's printing industry, I found much to remember and reflect upon in Jean-Marie Hershey's excellent post at PrintCEO.blog.com on the continuing disappearance of Manhattan's once-legendary printing districts. Having covered this story extensively as it unfolded over a period of many years, I'm reminded that New York's loss of stature as a print manufacturing center was indeed dramatic. I'm also awestruck, now as then, by the metro printing industry's capacity to outlast the very worst that market forces, time, and fate have conspired to heap upon it.
In the mid-1980s, when I began following the metro printing beat, lower Manhattan still was what it had been for decades prior to that: home to the largest concentration of printing businesses anywhere in the country. More than any other external factor, the realities of Manhattan's commercial real estate market gave the printing industry its special character and, unfortunately, its dangerous vulnerability to the slew of economic shocks that lay ahead.
The realities of Manhattan's commercial real estate market gave the printing industry its special character and its dangerous vulnerability to the economic shocks that lay ahead
The cramped nature of industrial properties in Manhattan - where almost no spacious, spread-out, single-story manufacturing buildings are to be found - made it difficult for printers to house prepress, postpress, and finishing departments alongside their pressrooms. As a result, the industry consisted mainly of "clusters" of printers and allied trade shops furnishing production services that the printers didn't have room to accommodate.
The Almighty Trinity
Many of these firms did their clustering in multi-story buildings throughout the district that Trinity Real Estate, the secular arm of historic Trinity Church and the printing industry's principal landlord, eventually christened "Hudson Square." Similar havens existed in Chelsea and on the far West Side - and, lest we forget, in Long Island City and a few other enclaves in the "outer boroughs" as well.
The clusters made sense, but for most of the firms inside them, operating a graphics business in New York City's printing districts was seldom less than a harsh daily struggle. Aggregating a multitude of busy, independent shops in one building might have been the next-best thing to vertical integration under one roof, but it could make sharing the building's single freight elevator a never-ending headache. Proximity to ad agencies, publishers, and other midtown customers was a plus, but anyone who has ever driven a car through the canyons of Manhattan in the middle of the day can picture what delivering a truckload of paper to any of these buildings was like.
Energy costs were punitive, as was the burden of the commercial rent tax. And, although many printers tried to downplay it, the imbalance between hourly rates for skilled printing help in New York City and wage scales elsewhere in the country made it difficult for metro shops to compete with outsiders on the all-important basis of price.
Yet somehow, these never-say-die entrepreneurs kept their doors open, their press time mostly booked, their employees paid, their customers happy, and their pugnacious chins up - until the grim event that suddenly called the viability of their entire industry into question.
The Day Everything Changed
I had just returned from the Print '01 show in Chicago when the aerial attacks of 9/11 all but paralyzed the sections of lower Manhattan where the bulk of the metro area's print community was concentrated. Some of these firms lost their space outright in evacuations brought on by air-quality concerns and other emergency conditions. Because, for weeks afterward, it simply wasn't possible to move about in the southern end of Manhattan island, even those who could stay in their premises were barred from producing corresponding amounts of work - an economic blow from which any printer, anywhere, would be extremely hard pressed to recover.
For weeks after 9/11, it simply wasn't possible to move about in the southern end of Manhattan island, and even those who could stay in their premises were barred from producing corresponding amounts of work
As we know, many printing tenants didn't recover, but even that tragic thinning of the ranks doesn't account for the reduced state in which the industry found itself once New York City had returned more or less to normal in the aftermath of the 9/11 attacks. By then, the factors noted by Jean-Marie and Dr. Joe Webb - soaring rents, out-of-state competition, and digital disintermediation, to say nothing of the stock market meltdown of 2000 - had already done their cruel work, as industrial censuses revealing the loss of hundreds of metro graphics businesses annually made painfully clear.
And while it would be easy to vilify Trinity Real Estate for doing what it did to jettison its lessees in the printing trades in the midst of all of this, it has to be acknowledged that many of these tenants would have succumbed anyway to other business pressures even if their landlord had wanted them to stay. Nor did printers get much help from the mayoral administrations of David Dinkins and Ed Koch, during which a series of changes to zoning regulations eliminated provisions that had protected printing buildings from being converted to non-industrial uses by their owners. The chic restaurants and the sleek luxury retailers we see in Manhattan districts once set aside for manufacturing are the legacy of those changes.
This You Call "Retention"?
In this writer's opinion, the City's contradictory policies on what it presumed to call "business retention" had as much to do with the diminishment of the printing industry as any action taken by the landlords. Among its feckless responses to the wave of conversions it had green-lighted with zoning handovers to the real estate interests were attempts to set up refuges for displaced printers in metro area backwaters such as Hunt's Point in the Bronx and the Brooklyn Army Terminal (a vast architectural relic from World War I) in that borough. Takers, predictably, were few.
Some in City government tried to be on the printers' side - for example, Alair Townsend, now the publishing director of Crain's New York Business, always listened sympathetically to them during her tenure as deputy mayor for finance and economic development in the Koch years. Print industry veterans Ira Brophy and Mark Baff also are warmly remembered for doing what they could as appointed liaisons to the print community.
It's also true that the City offered tax-advantaged industrial development bonds, relocation expense reimbursement, energy cost relief, and a few other forms of assistance to printers being squeezed to the limit by the hostility that the real estate market was now openly showing them. But, as Dr. Joe correctly notes in his response to the original post, this aid was reserved almost exclusively for those agreeing to uproot themselves from Manhattan's central business district and the Trinity enclaves where so many had done so much business for so long.
Remembrance and Celebration
The 9-11-07 publication date of the article in The New York Times cited by Jean-Marie is a pause-giving reminder that we have put only a handful of years between ourselves and the event that could have driven the metro area's much-battered printing industry over the brink of extinction - but didn't.
New York City still ranks among the nation's top five metropolitan area printing centers - not bad for a town that sometimes seems to have done everything to drive its printers away short of summoning the aid of an angel with a flaming sword
If, as Dr. Joe informs us, 885 commercial printers remain in Manhattan, that's a reason to celebrate the industry's amazing powers of endurance, not an excuse to lament the fact that it used to be bigger. That clustering continues to work is seen in the fact that PIA/GATF's Economic Research Department still ranks New York City among the nation's top five metropolitan area printing centers - not bad for a town that sometimes seems to have done everything to drive its printers away short of summoning the aid of an angel with a flaming sword.
Perhaps because it won't be long before I am one of them myself, I'm inclined to remember the things that the old-timers used to tell me about New York's printing industry in its heyday: that you couldn't enter a building south of 14th Street that didn't contain at least one printing business; that the rumble you felt as you walked along Hudson Street or Varick Street probably wasn't that of a passing subway train but of a web press running at full tilt.
That's the folklore, but on the night I learned that those flashes I would see bursting from the upper stories of darkened downtown buildings were the manmade lightning of camera departments in printing companies, I discovered a truth beyond refuting. New York City is and ever will be a printing town - even if things should again go from routinely bad to unimaginably worse as they did on the terrible day when we all found the true iron in the industry's indomitable soul.
Please offer your feedback to Patrick. He can be reached at pathenry@libordeath.com.
Americans giving up friends, sex for Web life
Americans giving up friends, sex for Web life
By Belinda Goldsmith
http://www.reuters.com/article/lifestyleMolt/idUSN1930215820070920
NEW YORK (Reuters Life!) - Surfing the net has become an obsession for many Americans with the majority of U.S. adults feeling they cannot go for a week without going online and one in three giving up friends and sex for the Web.
A survey asked 1,011 American adults how long they would feel OK without going on the Web, to which 15 percent said a just a day or less, 21 percent said a couple of days and another 19 percent said a few days.
Only a fifth of those who took part in an online survey conducted by advertising agency JWT between Sept 7 and 11 said they could go for a week.
"People told us how anxious, isolated and bored they felt when they are forced off line," said Ann Mack, director of trend spotting at JWT, which conducted the survey to see how technology was changing people's behavior.
"They felt disconnected from the world, from their friends and family," she told Reuters.
The poll, released on Wednesday, found the use of cell phones and the Internet were becoming more and more an essential part of life with 48 percent of respondents agreeing they felt something important was missing without Internet access.
More than a quarter of respondents -- or 28 percent -- admitted spending less time socializing face-to-face with peers because of the amount of time they spend online.
It also found that 20 percent said they spend less time having sex because they are online.
Cell phones won out over television in a question asking which device people couldn't go without but the Internet trumped all, regarded as the most necessary.
"It is taking away from offline activities, among them having sex, socializing face-to-face, watching TV and reading newspapers and magazines. It cuts into that share," said Mack.
"I don't suppose their partners are too pleased about it."
Mack said a clear trend to emerge from the survey was the increasing need for mobility with people no longer satisfied with just broadband access from home and wanting hand-held devices like iPhones and BlackBerrys.
JWT, whose parent company is WPP, has come up with a new advertising category for people whose lives are so tied up with new technology.
"We are calling them 'digitivity denizens,' those who see their cell phones as an extension of themselves, whose online and offline lives are co-mingled and who would chose a Wi-Fi connection over TV any day," said Mack.
"This is how they communicate, entertain and live."
By Belinda Goldsmith
http://www.reuters.com/article/lifestyleMolt/idUSN1930215820070920
NEW YORK (Reuters Life!) - Surfing the net has become an obsession for many Americans with the majority of U.S. adults feeling they cannot go for a week without going online and one in three giving up friends and sex for the Web.
A survey asked 1,011 American adults how long they would feel OK without going on the Web, to which 15 percent said a just a day or less, 21 percent said a couple of days and another 19 percent said a few days.
Only a fifth of those who took part in an online survey conducted by advertising agency JWT between Sept 7 and 11 said they could go for a week.
"People told us how anxious, isolated and bored they felt when they are forced off line," said Ann Mack, director of trend spotting at JWT, which conducted the survey to see how technology was changing people's behavior.
"They felt disconnected from the world, from their friends and family," she told Reuters.
The poll, released on Wednesday, found the use of cell phones and the Internet were becoming more and more an essential part of life with 48 percent of respondents agreeing they felt something important was missing without Internet access.
More than a quarter of respondents -- or 28 percent -- admitted spending less time socializing face-to-face with peers because of the amount of time they spend online.
It also found that 20 percent said they spend less time having sex because they are online.
Cell phones won out over television in a question asking which device people couldn't go without but the Internet trumped all, regarded as the most necessary.
"It is taking away from offline activities, among them having sex, socializing face-to-face, watching TV and reading newspapers and magazines. It cuts into that share," said Mack.
"I don't suppose their partners are too pleased about it."
Mack said a clear trend to emerge from the survey was the increasing need for mobility with people no longer satisfied with just broadband access from home and wanting hand-held devices like iPhones and BlackBerrys.
JWT, whose parent company is WPP, has come up with a new advertising category for people whose lives are so tied up with new technology.
"We are calling them 'digitivity denizens,' those who see their cell phones as an extension of themselves, whose online and offline lives are co-mingled and who would chose a Wi-Fi connection over TV any day," said Mack.
"This is how they communicate, entertain and live."
Big Media: TV, Print Important, But Digital Must Grow
On Media
Big Media: TV, Print Important, But Digital Must Grow
by Diane Mermigas, Wednesday
http://publications.mediapost.com/?fuseaction=Articles.san&s=67740&Nid=34535&p=204904
MAYBE YOU CAN HAVE IT both ways, at least for now.
Media company chief executives participating in the opening day of Goldman Sachs' annual Communacopia conference widely acknowledged the vulnerability of conventional television and print advertising, while hedging big bets on online target marketing, which has the potential of generating more wealth and sustained value across all of their platforms and businesses.
Clearly, the industry's massive, unsettling schism has Time Warner, News Corp., Walt Disney and Viacom gingerly walking the fence between the destabilizing old-line mass media and the emerging consumer-centric media economies--advertising being central to both in very different ways.
InterActiveCorp CEO Barry Diller does not mince words about the fate of 30-second TV spots and quarter-page print ads priced on estimated mass eyeballs. "Those businesses just absolutely have to be challenged," Diller declared at Tuesday's conference in New York.
"Are they still going to be mass engines of communications that are going to sell on a good spot basis and take revenues in? Yes. [But] there is no question that more and more will move over to the Internet. I can give you so many examples of ... the slow take of people in advertising because they have been essentially buying mass wholesale and it's been a fairly easy business," Diller said. "All of this is going to crack and change over the next few years because efficiency demands it."
However, all the media chief executives participating agreed that targeting the audience in precise ways to collect premiums from advertisers, which must be re-acclimated to their own radically changing business, is complex and challenging.
Time Warner CEO Richard Parsons conceded his company's struggle to monetize AOL, noting that it's now giving the fifth-largest Internet brand the advertising-support base it should have had initially. If you can't accomplish the transition from a subscription to an ad network in the midst of an online advertising explosion, when can you?
"The game is ours to lose," Parsons said of AOL's latest turnaround strategy. Parsons also dismissed concern voiced by Goldman Sachs analyst Anthony Noto and Liberty Media CEO Greg Maffei that the advertising and ratings for general entertainment cable networks (like Time Warner's TBS and TNT) could go the way of mass-oriented broadcast TV networks in an era of special interests and targeted consumers.
Viacom CEO Philippe Dauman simply stated his advertising transition strategy as "focusing on our top 200 to 300 advertisers ...with a tie-in to online programming" from the company's MTV, Nickelodeon and Paramount franchises. But that doesn't take into account the distinct differences in the interactive pitching of products and services, as well as relating to target consumers online--or the reticence, if not sheer ignorance, on the part of so many advertisers to even tread there.
Walt Disney CEO Bob Iger underscored his company's dependence on advertising for only 23% of its total revenues, before explaining the self-sufficient marketing interdependence of its core TV, film, online, theme park, consumer products and branded evergreen content businesses. It is the ultimate economic hedge. "We are not looking to grow advertiser-supported businesses as a company," Iger said. But there is no question that Disney's finely honed, targeted interactive strategy these days is all about new-wave marketing and advertising. Disney is the eighth-largest advertiser in the U.S. just behind media fellows Time Warner, Verizon Communications and AT&T.
News Corp. CEO Rupert Murdoch also declared his company more recession-proof than ever "because our revenues are increasingly non-advertising." For example, 60% of the more than $1 billion made from cable channels last year was generated from subscriptions and that will double over the next three years. All the same, he was quick to note that Fox's CPMs are up an average of 8% across its media platforms this fall, and that Fox Interactive Media is on target to generate more than $800 million in revenues this year on a doubling of targeted advertising clickthroughs.
While still milking old media advertising for all it is worth, News Corp. is feverishly working on more richly and broadly defined new media advertising models on its MySpace platform. "Hyper targeting this enormous audience we have ...has limitless possibilities. You can just see the money growing, and it's exactly what advertisers want, ..." Murdoch exclaimed at the Communacopia conference.
Driven by the new mantra--the more specialized the target, the higher the advertiser premium--News Corp. is preparing to monetize 110 million MySpace users by hyper-targeting their special interests, ZIP codes and any other common denominator that will sell Madison Avenue. Even an old-line media company like Dow Jones, which News Corp. is set to acquire for $5 billion, has untapped targeted value to advertisers, given its core affluent and influential readers, Murdoch said.
With the accelerating trend in online advertising shifts from premium ad inventory purchases to non-premium performance-based display ads, coupled with the fall-off in traditional media ad spending, media chieftains clearly recognize the need to straddle their core revenue from new and old sources. And that means going after advertising dollars everywhere they can, every way they can, by any name they want to give it.
Big Media: TV, Print Important, But Digital Must Grow
by Diane Mermigas, Wednesday
http://publications.mediapost.com/?fuseaction=Articles.san&s=67740&Nid=34535&p=204904
MAYBE YOU CAN HAVE IT both ways, at least for now.
Media company chief executives participating in the opening day of Goldman Sachs' annual Communacopia conference widely acknowledged the vulnerability of conventional television and print advertising, while hedging big bets on online target marketing, which has the potential of generating more wealth and sustained value across all of their platforms and businesses.
Clearly, the industry's massive, unsettling schism has Time Warner, News Corp., Walt Disney and Viacom gingerly walking the fence between the destabilizing old-line mass media and the emerging consumer-centric media economies--advertising being central to both in very different ways.
InterActiveCorp CEO Barry Diller does not mince words about the fate of 30-second TV spots and quarter-page print ads priced on estimated mass eyeballs. "Those businesses just absolutely have to be challenged," Diller declared at Tuesday's conference in New York.
"Are they still going to be mass engines of communications that are going to sell on a good spot basis and take revenues in? Yes. [But] there is no question that more and more will move over to the Internet. I can give you so many examples of ... the slow take of people in advertising because they have been essentially buying mass wholesale and it's been a fairly easy business," Diller said. "All of this is going to crack and change over the next few years because efficiency demands it."
However, all the media chief executives participating agreed that targeting the audience in precise ways to collect premiums from advertisers, which must be re-acclimated to their own radically changing business, is complex and challenging.
Time Warner CEO Richard Parsons conceded his company's struggle to monetize AOL, noting that it's now giving the fifth-largest Internet brand the advertising-support base it should have had initially. If you can't accomplish the transition from a subscription to an ad network in the midst of an online advertising explosion, when can you?
"The game is ours to lose," Parsons said of AOL's latest turnaround strategy. Parsons also dismissed concern voiced by Goldman Sachs analyst Anthony Noto and Liberty Media CEO Greg Maffei that the advertising and ratings for general entertainment cable networks (like Time Warner's TBS and TNT) could go the way of mass-oriented broadcast TV networks in an era of special interests and targeted consumers.
Viacom CEO Philippe Dauman simply stated his advertising transition strategy as "focusing on our top 200 to 300 advertisers ...with a tie-in to online programming" from the company's MTV, Nickelodeon and Paramount franchises. But that doesn't take into account the distinct differences in the interactive pitching of products and services, as well as relating to target consumers online--or the reticence, if not sheer ignorance, on the part of so many advertisers to even tread there.
Walt Disney CEO Bob Iger underscored his company's dependence on advertising for only 23% of its total revenues, before explaining the self-sufficient marketing interdependence of its core TV, film, online, theme park, consumer products and branded evergreen content businesses. It is the ultimate economic hedge. "We are not looking to grow advertiser-supported businesses as a company," Iger said. But there is no question that Disney's finely honed, targeted interactive strategy these days is all about new-wave marketing and advertising. Disney is the eighth-largest advertiser in the U.S. just behind media fellows Time Warner, Verizon Communications and AT&T.
News Corp. CEO Rupert Murdoch also declared his company more recession-proof than ever "because our revenues are increasingly non-advertising." For example, 60% of the more than $1 billion made from cable channels last year was generated from subscriptions and that will double over the next three years. All the same, he was quick to note that Fox's CPMs are up an average of 8% across its media platforms this fall, and that Fox Interactive Media is on target to generate more than $800 million in revenues this year on a doubling of targeted advertising clickthroughs.
While still milking old media advertising for all it is worth, News Corp. is feverishly working on more richly and broadly defined new media advertising models on its MySpace platform. "Hyper targeting this enormous audience we have ...has limitless possibilities. You can just see the money growing, and it's exactly what advertisers want, ..." Murdoch exclaimed at the Communacopia conference.
Driven by the new mantra--the more specialized the target, the higher the advertiser premium--News Corp. is preparing to monetize 110 million MySpace users by hyper-targeting their special interests, ZIP codes and any other common denominator that will sell Madison Avenue. Even an old-line media company like Dow Jones, which News Corp. is set to acquire for $5 billion, has untapped targeted value to advertisers, given its core affluent and influential readers, Murdoch said.
With the accelerating trend in online advertising shifts from premium ad inventory purchases to non-premium performance-based display ads, coupled with the fall-off in traditional media ad spending, media chieftains clearly recognize the need to straddle their core revenue from new and old sources. And that means going after advertising dollars everywhere they can, every way they can, by any name they want to give it.
Media X: Time Flies
Commentary
Media X: Time Flies
by Jack Feuer,
http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=67651&Nid=34480&p=204904
SMELLED LIKE OLD TIMES THIS week. Hillary Clinton unveiled a health plan. Sally Field babbled at an awards show. And O.J. Simpson went to the slammer. Hypocrisy fouled the air in the Eighties, when Field first made a fool of herself in an acceptance speech. Life reeked with irony in the Nineties, when Hillary's first foray into health reform crashed and burned, and Simpson was charged with his first felony.
But the 21st century just stinks. And I blame the media.
Twenty years ago, you heard what the Flying Nun did, but if you really liked her and didn't watch the Oscars live, you had to wait for the networks or cable -- if you had cable -- to rerun the clip. A decade later, if, like me, you only read sports in the newspaper, you didn't even know Hillary had a healthcare plan, let alone care.
Of course, nobody could ignore the Simpson trial, but at least that travesty was new enough that it could still titillate. Harvey Levin was still just a grating local news reporter, so mostly you fed your scandal fix with reportage from less-informed sources, like the Los Angeles Times. Or maybe one of the primeval Internet news sites, assuming AOL took less than a day to dial it up.
This time, though, I saw the Field Emmy clip online almost before she walked off the stage. I knew a new Clinton plan was coming four days before it arrived, because I heard some old guy named Carl Bernstein talking about it on "Real Time with Bill Maher."
I got the 411 on the Simpson burglary bust from TMZ.com, where Harvey Levin is now a grating Internet mogul. I spent a lot of time, maybe 30 seconds, boning up on the case, right after playing "Home Run Hero" on orbitzgames.com and just before lingering forever --had to be a minute at least -- on sciencedaily.com, reading about how Cyprian honeybees kill their enemies by smothering them.
See, people complain about inaccuracy in the media, about blog-fed, nut-job opinions replacing informed judgment, about all those three-screen options making us crazy, about easy access to all sorts of useless data. (Why do I know that Nancy Grace is pregnant? More importantly, why does that idea horrify me?)
But the real reason the media sucks in the first decade of what appears to be a spectacularly terrible century is speed. It's not how bad all this stuff is, or how much of it there is. It's how fast it flies at us. Too fast to avoid.
You get the dirty little picture now, don't you? We don't need fewer choices. We need slower choices.
And it couldn't hurt if Sally Field just retired already
Media X: Time Flies
by Jack Feuer,
http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=67651&Nid=34480&p=204904
SMELLED LIKE OLD TIMES THIS week. Hillary Clinton unveiled a health plan. Sally Field babbled at an awards show. And O.J. Simpson went to the slammer. Hypocrisy fouled the air in the Eighties, when Field first made a fool of herself in an acceptance speech. Life reeked with irony in the Nineties, when Hillary's first foray into health reform crashed and burned, and Simpson was charged with his first felony.
But the 21st century just stinks. And I blame the media.
Twenty years ago, you heard what the Flying Nun did, but if you really liked her and didn't watch the Oscars live, you had to wait for the networks or cable -- if you had cable -- to rerun the clip. A decade later, if, like me, you only read sports in the newspaper, you didn't even know Hillary had a healthcare plan, let alone care.
Of course, nobody could ignore the Simpson trial, but at least that travesty was new enough that it could still titillate. Harvey Levin was still just a grating local news reporter, so mostly you fed your scandal fix with reportage from less-informed sources, like the Los Angeles Times. Or maybe one of the primeval Internet news sites, assuming AOL took less than a day to dial it up.
This time, though, I saw the Field Emmy clip online almost before she walked off the stage. I knew a new Clinton plan was coming four days before it arrived, because I heard some old guy named Carl Bernstein talking about it on "Real Time with Bill Maher."
I got the 411 on the Simpson burglary bust from TMZ.com, where Harvey Levin is now a grating Internet mogul. I spent a lot of time, maybe 30 seconds, boning up on the case, right after playing "Home Run Hero" on orbitzgames.com and just before lingering forever --had to be a minute at least -- on sciencedaily.com, reading about how Cyprian honeybees kill their enemies by smothering them.
See, people complain about inaccuracy in the media, about blog-fed, nut-job opinions replacing informed judgment, about all those three-screen options making us crazy, about easy access to all sorts of useless data. (Why do I know that Nancy Grace is pregnant? More importantly, why does that idea horrify me?)
But the real reason the media sucks in the first decade of what appears to be a spectacularly terrible century is speed. It's not how bad all this stuff is, or how much of it there is. It's how fast it flies at us. Too fast to avoid.
You get the dirty little picture now, don't you? We don't need fewer choices. We need slower choices.
And it couldn't hurt if Sally Field just retired already
Battle at Top of the Newsstand Sales Pyramid
Battle at Top of the Newsstand Sales Pyramid
By Baird Davis
http://www.circman.com/viewmedia.asp?prmMID=3397
Six publishers-Time Inc, Bauer, American Media, Hearst, Wenner, and Conde Nast-dominate the newsstand scene. Their combined sales represent 60 percent of the audited consumer magazine market. These six publishing companies are fiercely contesting with one another for newsstand buyers.
But at the top of the sales pyramid it's not simply a publisher-centric contest. It's become a battle that pits, to some degree, the National Distributors against one another. Time Warner Retail, Comag (owned by Hearst and Conde Nast), Curtis, Kable and marketing and merchandising service provider Distribution Services, Inc (owned by American Media) are all actively involved in helping shape the industry to their own needs.
Each has a slightly different vision of how the newsstand should operate. Their divergent interests often make it difficult for them to agree on reform strategy. Unfortunately among national distributors, self interest typically rules.
Wholesaler Initiated Change
Wholesalers, lacking industry leadership from publishers and national distributors, have started taking matters into their own hands. The wholesaler community has begun to fill the market reform vacuum with much more aggressive (albeit self motivated) action.
Let's review what wholesalers have done in the last year or so.
1. Unilaterally Reduced The Number of Copies Distributed-Two of the largest wholesaler groups, Anderson News and News Group, have made unilateral decisions that have taken as many as 140 million copies out of distribution. Wholesalers have reported (confirmed by most national distributors) a four to five percentage point improvement in efficiency without any appreciable loss in sales.
2. Combined Distribution Operations-Anderson News and the News Group have formed a separate company, Prologix, to handle distribution for both companies in selected high traffic locations. By most accounts the results, after a shaky start, indicate that performance at these distribution centers has greatly improved. This has reduced operational costs, without seriously impairing the level of service.
3. Formed Wholesaler Industry Group-Anderson News, News Group and Hudson News formed a group (Magnet) to share information and other things of mutual interest. Their combined influence, especially as a purveyor of information, is now being felt across the industry.
4. Influenced Publisher Cover Pricing Decisions-Wholesalers, reportedly, helped persuade Bauer to increase the cover prices on all its titles. These changes will take effect in the fourth quarter of this year and undoubtedly will have a profound industry effect on future product pricing and revenue.
5. Increased the Number of Scan Based Trading (SBT) Agreements-Wholesalers, in an attempt to satisfy retailer requirements, have recently been aggressive in expanding the scale of their SBT agreements. It's believed that SBT agreements currently represent about 25 percent of wholesaler sales. The percentage is expected to go much higher in the next few years.
6. Tightening Their Relations with Retailers-Wholesalers, by offering - SBT, more in-store merchandising service, more tightly controlling "authorized" lists and managing more promotion programs - are forming tighter bonds with their retailers. This, in turn, has made it more difficult for publishers and national distributors to exert influence with retailers.
Balancing the Newsstand Playing Field
In the "post-consolidation" period, the surviving wholesalers were forced to the financial brink. But in the absence of unified publisher and national distributor effort they are now fighting back. Many of their initiatives appear to have improved industry services. However, for publishers and national distributors there is a real danger in allowing wholesalers, often in conjunction with retailers, to act in such an independent manner.
In order to balance the newsstand playing field, national distributors and publishers must step up to the plate, not individually, but in a unified manner. If they don't, they risk not playing a significant role in what now appears to be a burgeoning wholesaler led industry reform movement.
By Baird Davis
http://www.circman.com/viewmedia.asp?prmMID=3397
Six publishers-Time Inc, Bauer, American Media, Hearst, Wenner, and Conde Nast-dominate the newsstand scene. Their combined sales represent 60 percent of the audited consumer magazine market. These six publishing companies are fiercely contesting with one another for newsstand buyers.
But at the top of the sales pyramid it's not simply a publisher-centric contest. It's become a battle that pits, to some degree, the National Distributors against one another. Time Warner Retail, Comag (owned by Hearst and Conde Nast), Curtis, Kable and marketing and merchandising service provider Distribution Services, Inc (owned by American Media) are all actively involved in helping shape the industry to their own needs.
Each has a slightly different vision of how the newsstand should operate. Their divergent interests often make it difficult for them to agree on reform strategy. Unfortunately among national distributors, self interest typically rules.
Wholesaler Initiated Change
Wholesalers, lacking industry leadership from publishers and national distributors, have started taking matters into their own hands. The wholesaler community has begun to fill the market reform vacuum with much more aggressive (albeit self motivated) action.
Let's review what wholesalers have done in the last year or so.
1. Unilaterally Reduced The Number of Copies Distributed-Two of the largest wholesaler groups, Anderson News and News Group, have made unilateral decisions that have taken as many as 140 million copies out of distribution. Wholesalers have reported (confirmed by most national distributors) a four to five percentage point improvement in efficiency without any appreciable loss in sales.
2. Combined Distribution Operations-Anderson News and the News Group have formed a separate company, Prologix, to handle distribution for both companies in selected high traffic locations. By most accounts the results, after a shaky start, indicate that performance at these distribution centers has greatly improved. This has reduced operational costs, without seriously impairing the level of service.
3. Formed Wholesaler Industry Group-Anderson News, News Group and Hudson News formed a group (Magnet) to share information and other things of mutual interest. Their combined influence, especially as a purveyor of information, is now being felt across the industry.
4. Influenced Publisher Cover Pricing Decisions-Wholesalers, reportedly, helped persuade Bauer to increase the cover prices on all its titles. These changes will take effect in the fourth quarter of this year and undoubtedly will have a profound industry effect on future product pricing and revenue.
5. Increased the Number of Scan Based Trading (SBT) Agreements-Wholesalers, in an attempt to satisfy retailer requirements, have recently been aggressive in expanding the scale of their SBT agreements. It's believed that SBT agreements currently represent about 25 percent of wholesaler sales. The percentage is expected to go much higher in the next few years.
6. Tightening Their Relations with Retailers-Wholesalers, by offering - SBT, more in-store merchandising service, more tightly controlling "authorized" lists and managing more promotion programs - are forming tighter bonds with their retailers. This, in turn, has made it more difficult for publishers and national distributors to exert influence with retailers.
Balancing the Newsstand Playing Field
In the "post-consolidation" period, the surviving wholesalers were forced to the financial brink. But in the absence of unified publisher and national distributor effort they are now fighting back. Many of their initiatives appear to have improved industry services. However, for publishers and national distributors there is a real danger in allowing wholesalers, often in conjunction with retailers, to act in such an independent manner.
In order to balance the newsstand playing field, national distributors and publishers must step up to the plate, not individually, but in a unified manner. If they don't, they risk not playing a significant role in what now appears to be a burgeoning wholesaler led industry reform movement.
Google's plan to poach election traffic
Google's plan to poach election traffic
Google is road-testing a major initiative capable of hijacking a good deal of the web traffic the mainstream media ordinarily would get during the 2008 election in the United States.
Fortunately for the MSM, Google's ambitious new online publishing project went on public view last week in Australia. So, American newspapers interested in preserving as much of their flat-lining web traffic as possible should waste no time in taking a look at Australia Votes, the up-and-coming way of presenting the political news from Down Under.
Australia Votes signals a significant strategic shift on the part of Google to become a primary web destination, as opposed to restricting itself to its historic role as a supplemental, though highly valuable, research tool. As such, it eventually could compete head to head with not only the likes of CNN, the Washington Post and all the other media biggies but also with the tiniest of tiny weeklies.
If you don't think the mainstream media are vulnerable to Google's greater growth, look at the data.
As you can see in the graph below from Alexa.Com, Google and its new subsidiary, You Tube - respectively the third and fourth busiest sites on the Internet - have been gobbling market share over the last three years at the expense of the mainstream media (and, of course, certain other competitors, too). The combined traffic of Google and You Tube would lift them well above Yahoo and Microsoft, the top two sites.
Meanwhile, ABC, the highest-ranking MSM site, has dropped to No. 48 today from a position in the 20s three years ago. And the New York Times, the highest-ranking newspaper site, has fallen to 209 today from the top 50 in the early part of 2006.
The Google election project, an elegant mashup of Google's arsenal of search, mapping, video, widget and other technologies, is a preview of how all but the most technologically recalcitrant consumers will expect to get political - and many other types of - news in the future. In addition to delivering a wealth of well-packaged election information and interactive tools, Google has created four content-pushing widgets and a number of ways for users to express their opinions via forums and home-brewed video.
I'm going to save myself a bunch of typing (and you a lot of reading) by linking here to the promotional video on the project that Google has posted at the explosively growing You Tube. Before you go, however, let's consider the implications of this latest affront to the once-unchallenged power and glory of the legacy media companies:
Australia Votes - and the all but certain sequel, America Votes - demonstrates emphatically the lopsided competitive advantage Google (and similar but less formidable web publishers) has over the traditional media companies.
While the MSM bear the enormous costs of producing content and delivering it via capital-intensive print or broadcast infrastructures, Google (a) pays nothing for the content it scours off MSM web sites, (b) incurs essentially no costs in selling advertising and (c) spends a trivial percentage of its more than $13 billion in annual sales on the 24/7 data centers that require human intervention only when they go awry.
Although Google is brilliant at finding, aggregating, indexing and rapidly presenting the collective wit and wisdom of the web, dozens of libraries worth of books and a growing array of public documents, Australia Votes, like all Google products, contains zero original content produced by Google, if you don't count the promotional video. Instead, Google is populating Australia Votes with original content provided for free by the mainstream media companies whose lunch, as previously reported here, it already has begun to eat.
Now or in the future, Google can make money off the large and expanding audience of sites like Australia Votes by selling advertising to marketers who use a totally automated, self-service system that gives them immense control over their buys and the instant gratification of minutely tracking the success of their campaigns. What Google does not have is the sort of large, highly compensated sales staff that is employed by every newspaper, magazine and broadcast outlet in the country (save for public broadcasters, who rely on the support of listeners and viewers like you).
Unlike the humans creating content, selling ads and producing products at the legacy media companies, Google's massive computer arrays do not require lunch breaks, sleep, vacations or union representation. To be clear: I'm not against lunch, sleep, vacations or union representation, each of which I have enjoyed to a greater or lesser extent in the course of my career.
But Google's boldest-yet intrusion into the formerly sacred space of the MSM underscores the urgent need for legacy operators to cut their embedded costs to be able to compete in the future with Australia Votes and the many similar initiatives surely coming down the line.
Among other efforts, the MSM need to take a page from Google by learning to publish efficient, compelling and customizable database-driven sites like Australia Votes or Chicago Crime. And they need to emulate the frictionless online advertising platform that fuels Google's high-margin success.
And here's one more out-of-the-box idea: The MSM may want to start thinking about charging Google for their valuable content before they discover they can't afford to produce it any more.
UPDATE 9/17/07: The cautionary note in the above paragraph goes double for the New York Times, which announced today that it will stop charging for access to its premier columnists.
The decision sort of makes sense, given the steady deterioration in the newspaper's web traffic since Times Select launched two years ago this month (see graph below). While this decision may arrest the declining ratings of the Times web site and create a decent number of new premium advertising opportunities, the comparatively small amount of fresh ad revenue generated by this decision will not sustain over the long term the formidable expense of generating the content for which the Times is rightfully admired.
Accordingly, the Times and the other MSM need to work harder than ever to cost-effectively produce engaging new-media content to compete with initiatives like Australia Votes that threaten to take ever-more-meaningful chunks out of the mainstream media business.
Google is road-testing a major initiative capable of hijacking a good deal of the web traffic the mainstream media ordinarily would get during the 2008 election in the United States.
Fortunately for the MSM, Google's ambitious new online publishing project went on public view last week in Australia. So, American newspapers interested in preserving as much of their flat-lining web traffic as possible should waste no time in taking a look at Australia Votes, the up-and-coming way of presenting the political news from Down Under.
Australia Votes signals a significant strategic shift on the part of Google to become a primary web destination, as opposed to restricting itself to its historic role as a supplemental, though highly valuable, research tool. As such, it eventually could compete head to head with not only the likes of CNN, the Washington Post and all the other media biggies but also with the tiniest of tiny weeklies.
If you don't think the mainstream media are vulnerable to Google's greater growth, look at the data.
As you can see in the graph below from Alexa.Com, Google and its new subsidiary, You Tube - respectively the third and fourth busiest sites on the Internet - have been gobbling market share over the last three years at the expense of the mainstream media (and, of course, certain other competitors, too). The combined traffic of Google and You Tube would lift them well above Yahoo and Microsoft, the top two sites.
Meanwhile, ABC, the highest-ranking MSM site, has dropped to No. 48 today from a position in the 20s three years ago. And the New York Times, the highest-ranking newspaper site, has fallen to 209 today from the top 50 in the early part of 2006.
The Google election project, an elegant mashup of Google's arsenal of search, mapping, video, widget and other technologies, is a preview of how all but the most technologically recalcitrant consumers will expect to get political - and many other types of - news in the future. In addition to delivering a wealth of well-packaged election information and interactive tools, Google has created four content-pushing widgets and a number of ways for users to express their opinions via forums and home-brewed video.
I'm going to save myself a bunch of typing (and you a lot of reading) by linking here to the promotional video on the project that Google has posted at the explosively growing You Tube. Before you go, however, let's consider the implications of this latest affront to the once-unchallenged power and glory of the legacy media companies:
Australia Votes - and the all but certain sequel, America Votes - demonstrates emphatically the lopsided competitive advantage Google (and similar but less formidable web publishers) has over the traditional media companies.
While the MSM bear the enormous costs of producing content and delivering it via capital-intensive print or broadcast infrastructures, Google (a) pays nothing for the content it scours off MSM web sites, (b) incurs essentially no costs in selling advertising and (c) spends a trivial percentage of its more than $13 billion in annual sales on the 24/7 data centers that require human intervention only when they go awry.
Although Google is brilliant at finding, aggregating, indexing and rapidly presenting the collective wit and wisdom of the web, dozens of libraries worth of books and a growing array of public documents, Australia Votes, like all Google products, contains zero original content produced by Google, if you don't count the promotional video. Instead, Google is populating Australia Votes with original content provided for free by the mainstream media companies whose lunch, as previously reported here, it already has begun to eat.
Now or in the future, Google can make money off the large and expanding audience of sites like Australia Votes by selling advertising to marketers who use a totally automated, self-service system that gives them immense control over their buys and the instant gratification of minutely tracking the success of their campaigns. What Google does not have is the sort of large, highly compensated sales staff that is employed by every newspaper, magazine and broadcast outlet in the country (save for public broadcasters, who rely on the support of listeners and viewers like you).
Unlike the humans creating content, selling ads and producing products at the legacy media companies, Google's massive computer arrays do not require lunch breaks, sleep, vacations or union representation. To be clear: I'm not against lunch, sleep, vacations or union representation, each of which I have enjoyed to a greater or lesser extent in the course of my career.
But Google's boldest-yet intrusion into the formerly sacred space of the MSM underscores the urgent need for legacy operators to cut their embedded costs to be able to compete in the future with Australia Votes and the many similar initiatives surely coming down the line.
Among other efforts, the MSM need to take a page from Google by learning to publish efficient, compelling and customizable database-driven sites like Australia Votes or Chicago Crime. And they need to emulate the frictionless online advertising platform that fuels Google's high-margin success.
And here's one more out-of-the-box idea: The MSM may want to start thinking about charging Google for their valuable content before they discover they can't afford to produce it any more.
UPDATE 9/17/07: The cautionary note in the above paragraph goes double for the New York Times, which announced today that it will stop charging for access to its premier columnists.
The decision sort of makes sense, given the steady deterioration in the newspaper's web traffic since Times Select launched two years ago this month (see graph below). While this decision may arrest the declining ratings of the Times web site and create a decent number of new premium advertising opportunities, the comparatively small amount of fresh ad revenue generated by this decision will not sustain over the long term the formidable expense of generating the content for which the Times is rightfully admired.
Accordingly, the Times and the other MSM need to work harder than ever to cost-effectively produce engaging new-media content to compete with initiatives like Australia Votes that threaten to take ever-more-meaningful chunks out of the mainstream media business.
The Distribution Trap
BoSacks Speaks Out: I thought this was a great read. It is thought provoking and insightful. It is not exactly focused on our industry, but then again, the parallels are fully and clearly evident.
"A farmer who had a quarrelsome family called his sons and told them to lay a bunch of sticks before him. Then, after laying the sticks parallel to one another and binding them, he challenged his sons, one after one, to pick up the bundle and break it. They all tried, but in vain. Then, untying the bundle, he gave them the sticks to break one by one. This they did with the greatest ease. Then said the father, Thus, my sons, as long as you remain united, you are a match for anything, but differ and separate, and you are undone."
Aesop quotes (Ancient Greek Fabulist and Author of a collection of Greek fables. 620 BC-560 BC)
The Distribution Trap
By ANDREW R. THOMAS and TIMOTHY J. WILKINSON
September 15, 2007; Page R8
http://online.wsj.com/article/SB118841591526312410.html?mod=djemSB
It's every manufacturer's dream to get on the shelves of Wal-Mart and other mega-retailers. Too often, it turns into a nightmare
For many companies, the lure of partnering with a mega-retailer is irresistible: Giants like Wal-Mart Stores Inc. and Home Depot Inc. can put products in front of hundreds of millions of customers -- and potentially bring in huge gains in sales and market share.
But behind those high hopes may be a faulty premise -- one that can lead to disaster for many companies. Whether out of naiveté, arrogance or greed, manufacturers expect that the big retailers will care about the success of their products as much as they do.
And in the end, many companies discover that all the blood, sweat, tears and money they've poured into their products has been wasted: Their hard-won creations have been turned into commodities with razor-thin profit margins.
Lost in the Crowd
This is particularly damaging for companies with innovative products. In a mega-store, shelves are packed with competing products from multiple manufacturers.
An innovative product loses its luster when it's surrounded by a slew of potential substitutes, many of which are cheap knockoffs. Numerous companies even agree to make copies of their own brands for the retailer. Compounding the problem: Clerks at the store often receive little or no training on the specifics of the products on display. Employees may know only where a product is located, not what makes it stand out.
Having created the process and product, and invested time and money, why would companies turn the final stage of the operation over to a third party? To avoid this outcome, companies must control their own distribution.
Of course, going it alone often means less volume, but the advantages of doing so are likely to make up for it. Companies that keep a tight rein on distribution have a greater ability to control pricing, customer service and after-sales service. They can also build stronger, longer-lasting relationships with their customers.
Below, we'll explore how the lopsided relationship between manufacturers and retailers evolved and show the disastrous consequences it has had for some companies. Then we'll look at how other companies have avoided the distribution trap -- and are doing the job right.
Core Concerns
Manufacturers began surrendering control to retailers several decades ago. At the time, many academics and business gurus were urging manufacturers to focus exclusively on their core competencies and outsource everything else -- including sales and distribution.
In the short term, the strategy worked. Companies were able to lower transaction costs, boost efficiency and liberate themselves from jobs that weren't essential to their business operations.
But there was an unforeseen consequence. Retail chains and mass discounters began to take on tremendous power. By the beginning of the 21st century, what we call mega-distributors, or megas for short, were dominant players in the American economy. They could demand lower prices from vendors, insist upon product alterations and even dictate changes in manufacturers' internal operations -- such as demanding that suppliers begin using new merchandise-tracking systems.
The mega-distributors insist that such a shift has been beneficial for the economy as a whole, and customers in particular. For instance, Wal-Mart spokeswoman Linda Blakley says the company's "aim is simple." The retailer is "looking out for the customers' best interests and working hard to save them money on the items they want to buy. We know thousands of suppliers see the benefit of that, too, and don't buy the argument that we ought to live in a world where prices should be higher and items harder to find."
A BIG MISTAKE?
The Hope: Many companies see deals with mega-retailers as a great way to boost sales and market share.
The Reality: Mega-retailers live by high volume and low prices -- so they use their powerful leverage to demand price cuts and other concessions from their suppliers. Companies end up with thin profit margins, and their innovative products are often treated as little more than commodities.
The Solution: Companies must control their own distribution -- whether that means driving hard bargains with retailers, executing a direct-marketing strategy or even opening their own outlets.Still, for many suppliers, the outcome is not so happy. The saga of toy maker Little Tikes shows what happens when manufacturers give up control over distribution. First, some background. During the 1960s, the strategy of large retailers was to identify the most popular items from toy makers and use them as loss leaders to draw in parents. This created a chain reaction. Smaller stores were forced to lower their prices, too, and thereby endure unacceptable profit margins. The smaller stores then put pressure on wholesalers, who demanded lower prices from the toy makers -- who in turn were forced to lower product quality and make cheaper toys.
Little Tikes founder Thomas G. Murdough Jr. was unhappy with the poorly made toys flooding the market. He believed that he could avoid the deep discounting and low product quality of other manufacturers by keeping tight control over distribution.
When he founded the company in 1970, he developed toys using a technology called rotational molding. Borrowed from methods used to produce large agricultural and chemical containers, the process allowed Mr. Murdough to mold plastic toys that were more durable than others on the market.
When it came time to bring his toys to the public, he focused on creating word-of-mouth among parents and building effective relationships with independent distributors. The company did sell through large chains, but instituted a firm pricing plan. Little Tikes offered its retail partners a 3% advertising discount on products -- but they would lose that discount if they sold the products below a minimum advertised price. In addition, Little Tikes only selectively released new, innovative products -- the lifeblood of the company -- to mass retailers.
The combined strategy of cutting-edge innovation and control over sales and distribution was an overwhelming success.
In 1984, Mr. Murdough sold his company to Rubbermaid for $50 million, but stayed on as president. Rubbermaid officials placed pressure on Mr. Murdough to distribute more new Little Tikes products through mass retailers. Frustrated, Mr. Murdough resigned in 1989.
Rubbermaid dropped the selective-distribution and discount policies. Sales temporarily skyrocketed.
But problems were brewing. The perception of exclusivity that had been the brand's hallmark was lost in the jumble of neighboring and inexpensive Chinese toys. While the firm kept innovating, its products no longer seemed special. Ultimately, the Little Tikes name came to be associated with deeply discounted toys sold on the mass market. And retailers, who had been slashing prices on the toys, realized they weren't making any money -- destroying their incentive to carry the products.
The move into megas, coupled with generally slowing demand and higher materials costs, proved disastrous. In 2005, Little Tikes had sales of around $250 million, $20 million less than in 1989. In 2006, Newell Rubbermaid Inc. sold Little Tikes to MGA Entertainment Inc.
Newell Rubbermaid spokesman David Doolittle says, "As markets change, business strategies must evolve, and we managed Little Tikes in line with the shifting dynamics of the toy market." Isaac Larian, chief executive of MGA Entertainment, says, "The Little Tikes brand remains very powerful and positive with consumers. Little Tikes is often rated as the most trusted, durable, safe and fun brand in the market segments in which it competes."
For another stark example of the megas' power, consider the case of car companies and dealerships. Until the 1980s, auto retailing consisted largely of independent dealerships that relied mainly on selling one brand for their livelihood. These dealers, which could not match the economic power of Ford Motor Co., General Motors Corp. or Chrysler Corp., had to follow the dictates of managers in Detroit. The large auto makers had the power to make life very easy or very hard for these distributors.
Then foreign competition -- especially from Japan -- became a major threat to the Big Three car makers. So they took a drastic step to boost flagging sales. Beginning in the late 1970s, manufacturers permitted their dealers to sell other brands if those brands didn't constitute direct competition. For instance, a luxury-car dealer would probably be allowed to sell another manufacturer's economy cars.
In time, this eroded the manufacturers' power over their dealers -- and more and more dealers basically began selling everything. Detroit had only two options: drop the dealers and create a completely new sales and distribution network or learn to get along with the new power structure. Not wanting to start over, Detroit chose to stay with the existing dealer network.
The result? Detroit now finds itself dealing with nationwide chains of mega-dealers. For these retailers, the only brand that matters is the one serving their purposes at a particular moment. If there's a new model at Ford that the buying public doesn't like, a dealer can seamlessly shift to selling "better" Chevrolets, Dodges or Hyundais.
For the mega, it's no problem. Customers will still buy, revenue will continue to come in, and the dealership will continue to grow. But what about Ford? The company has borne the risk of developing new products, dealt with the lawyers and government safety inspectors, spent tens of millions on engineering tests and designs, conducted thousands of hours of costly market research, sourced new parts from suppliers and retooled its manufacturing processes.
but because Ford can't influence its big distributors in a meaningful way, it has no margin for error in anticipating customer tastes. If it brings out a car that isn't popular, it can't force the dealer network to carry the car and try to sell it.
Ford says that the dealership picture is more complex than presented here. The current system evolved, the company says, because of a number of factors -- driven by car companies, dealers and state laws. Moreover, the company notes, dealers who are awarded a Ford, Lincoln or Mercury franchise offer a full line of the brand's merchandise in their showrooms as part of their franchising agreement.
The company also argues that it is being aggressive about delivering "more of the products customers really want, including new cars, crossovers and trucks that feature advancements in safety, quality, environmental innovation and design."
Staying in Control
How do manufacturers avoid the distribution trap? Follow the example of companies such as Harley-Davidson Inc. and Caterpillar Inc., which have recognized the critical importance of controlling what happens to their products throughout the sales and distribution chain. And that means they have used the creative energy of their employees to benefit their own stakeholders, rather than those of the mass marketers.
One way for a growing company to avoid the influence of the megas is through smart acquisitions. Instead of placing products in a big retailer to boost volume, a company could acquire other businesses that have strong ties to independent distributors. That way, even if the company's core business must work with the megas, its other product lines can grow outside their influence.
Still, controlling distribution doesn't necessarily mean avoiding big distributors entirely. If companies must deal with retail giants, they should push for favorable terms -- ideally, working with them as truly equal partners.
Take Nike Inc.'s relationship with the big athletic retailer Foot Locker Inc. The companies are teaming up to launch a network of specialty basketball stores called House of Hoops by Foot Locker, which will sell only Nike products. The move served Nike's larger strategy of targeting core consumer segments.
Finally, controlling distribution may mean selling directly to customers. This can take a number of forms. The most expensive -- and risky -- is setting up proprietary outlets. Nike, for instance, operates a variety of company stores along with House of Hoops.
Of course, most companies won't have the means to create retail stores. Fortunately, the Internet and other technologies have made it simple to sell directly to customers.
Striking a Balance
Consider Step2 Co., a maker of toddler and preschool play products and home-and-garden products that Mr. Murdough founded after leaving Little Tikes. For years, the toy maker has been striking a delicate balance between selling through the megas and selling directly to customers.
The company, owned by private-equity firm Liberty Partners, sells many products through mass retailers, which helps build brand awareness. But Step2 keeps its newest innovations close to the vest. It often offers them exclusively through the company's Web site and independent retailers that support the complete line. Only much later -- after the products' novelty value has worn off -- does Step2 offer them through outside retailers.
For instance, the company launched the LifeStyle Deluxe Kitchen and LifeStyle Grand Walk-In Kitchen play sets as exclusives on the Web. After a year or so, they moved into wider release.
In conclusion, selling through the megas is almost irresistible for most firms. But before producers fall into the arms of the mass marketers, they should consider whether the benefits outweigh the risk of losing control over their products, processes and internal operations.
"A farmer who had a quarrelsome family called his sons and told them to lay a bunch of sticks before him. Then, after laying the sticks parallel to one another and binding them, he challenged his sons, one after one, to pick up the bundle and break it. They all tried, but in vain. Then, untying the bundle, he gave them the sticks to break one by one. This they did with the greatest ease. Then said the father, Thus, my sons, as long as you remain united, you are a match for anything, but differ and separate, and you are undone."
Aesop quotes (Ancient Greek Fabulist and Author of a collection of Greek fables. 620 BC-560 BC)
The Distribution Trap
By ANDREW R. THOMAS and TIMOTHY J. WILKINSON
September 15, 2007; Page R8
http://online.wsj.com/article/SB118841591526312410.html?mod=djemSB
It's every manufacturer's dream to get on the shelves of Wal-Mart and other mega-retailers. Too often, it turns into a nightmare
For many companies, the lure of partnering with a mega-retailer is irresistible: Giants like Wal-Mart Stores Inc. and Home Depot Inc. can put products in front of hundreds of millions of customers -- and potentially bring in huge gains in sales and market share.
But behind those high hopes may be a faulty premise -- one that can lead to disaster for many companies. Whether out of naiveté, arrogance or greed, manufacturers expect that the big retailers will care about the success of their products as much as they do.
And in the end, many companies discover that all the blood, sweat, tears and money they've poured into their products has been wasted: Their hard-won creations have been turned into commodities with razor-thin profit margins.
Lost in the Crowd
This is particularly damaging for companies with innovative products. In a mega-store, shelves are packed with competing products from multiple manufacturers.
An innovative product loses its luster when it's surrounded by a slew of potential substitutes, many of which are cheap knockoffs. Numerous companies even agree to make copies of their own brands for the retailer. Compounding the problem: Clerks at the store often receive little or no training on the specifics of the products on display. Employees may know only where a product is located, not what makes it stand out.
Having created the process and product, and invested time and money, why would companies turn the final stage of the operation over to a third party? To avoid this outcome, companies must control their own distribution.
Of course, going it alone often means less volume, but the advantages of doing so are likely to make up for it. Companies that keep a tight rein on distribution have a greater ability to control pricing, customer service and after-sales service. They can also build stronger, longer-lasting relationships with their customers.
Below, we'll explore how the lopsided relationship between manufacturers and retailers evolved and show the disastrous consequences it has had for some companies. Then we'll look at how other companies have avoided the distribution trap -- and are doing the job right.
Core Concerns
Manufacturers began surrendering control to retailers several decades ago. At the time, many academics and business gurus were urging manufacturers to focus exclusively on their core competencies and outsource everything else -- including sales and distribution.
In the short term, the strategy worked. Companies were able to lower transaction costs, boost efficiency and liberate themselves from jobs that weren't essential to their business operations.
But there was an unforeseen consequence. Retail chains and mass discounters began to take on tremendous power. By the beginning of the 21st century, what we call mega-distributors, or megas for short, were dominant players in the American economy. They could demand lower prices from vendors, insist upon product alterations and even dictate changes in manufacturers' internal operations -- such as demanding that suppliers begin using new merchandise-tracking systems.
The mega-distributors insist that such a shift has been beneficial for the economy as a whole, and customers in particular. For instance, Wal-Mart spokeswoman Linda Blakley says the company's "aim is simple." The retailer is "looking out for the customers' best interests and working hard to save them money on the items they want to buy. We know thousands of suppliers see the benefit of that, too, and don't buy the argument that we ought to live in a world where prices should be higher and items harder to find."
A BIG MISTAKE?
The Hope: Many companies see deals with mega-retailers as a great way to boost sales and market share.
The Reality: Mega-retailers live by high volume and low prices -- so they use their powerful leverage to demand price cuts and other concessions from their suppliers. Companies end up with thin profit margins, and their innovative products are often treated as little more than commodities.
The Solution: Companies must control their own distribution -- whether that means driving hard bargains with retailers, executing a direct-marketing strategy or even opening their own outlets.Still, for many suppliers, the outcome is not so happy. The saga of toy maker Little Tikes shows what happens when manufacturers give up control over distribution. First, some background. During the 1960s, the strategy of large retailers was to identify the most popular items from toy makers and use them as loss leaders to draw in parents. This created a chain reaction. Smaller stores were forced to lower their prices, too, and thereby endure unacceptable profit margins. The smaller stores then put pressure on wholesalers, who demanded lower prices from the toy makers -- who in turn were forced to lower product quality and make cheaper toys.
Little Tikes founder Thomas G. Murdough Jr. was unhappy with the poorly made toys flooding the market. He believed that he could avoid the deep discounting and low product quality of other manufacturers by keeping tight control over distribution.
When he founded the company in 1970, he developed toys using a technology called rotational molding. Borrowed from methods used to produce large agricultural and chemical containers, the process allowed Mr. Murdough to mold plastic toys that were more durable than others on the market.
When it came time to bring his toys to the public, he focused on creating word-of-mouth among parents and building effective relationships with independent distributors. The company did sell through large chains, but instituted a firm pricing plan. Little Tikes offered its retail partners a 3% advertising discount on products -- but they would lose that discount if they sold the products below a minimum advertised price. In addition, Little Tikes only selectively released new, innovative products -- the lifeblood of the company -- to mass retailers.
The combined strategy of cutting-edge innovation and control over sales and distribution was an overwhelming success.
In 1984, Mr. Murdough sold his company to Rubbermaid for $50 million, but stayed on as president. Rubbermaid officials placed pressure on Mr. Murdough to distribute more new Little Tikes products through mass retailers. Frustrated, Mr. Murdough resigned in 1989.
Rubbermaid dropped the selective-distribution and discount policies. Sales temporarily skyrocketed.
But problems were brewing. The perception of exclusivity that had been the brand's hallmark was lost in the jumble of neighboring and inexpensive Chinese toys. While the firm kept innovating, its products no longer seemed special. Ultimately, the Little Tikes name came to be associated with deeply discounted toys sold on the mass market. And retailers, who had been slashing prices on the toys, realized they weren't making any money -- destroying their incentive to carry the products.
The move into megas, coupled with generally slowing demand and higher materials costs, proved disastrous. In 2005, Little Tikes had sales of around $250 million, $20 million less than in 1989. In 2006, Newell Rubbermaid Inc. sold Little Tikes to MGA Entertainment Inc.
Newell Rubbermaid spokesman David Doolittle says, "As markets change, business strategies must evolve, and we managed Little Tikes in line with the shifting dynamics of the toy market." Isaac Larian, chief executive of MGA Entertainment, says, "The Little Tikes brand remains very powerful and positive with consumers. Little Tikes is often rated as the most trusted, durable, safe and fun brand in the market segments in which it competes."
For another stark example of the megas' power, consider the case of car companies and dealerships. Until the 1980s, auto retailing consisted largely of independent dealerships that relied mainly on selling one brand for their livelihood. These dealers, which could not match the economic power of Ford Motor Co., General Motors Corp. or Chrysler Corp., had to follow the dictates of managers in Detroit. The large auto makers had the power to make life very easy or very hard for these distributors.
Then foreign competition -- especially from Japan -- became a major threat to the Big Three car makers. So they took a drastic step to boost flagging sales. Beginning in the late 1970s, manufacturers permitted their dealers to sell other brands if those brands didn't constitute direct competition. For instance, a luxury-car dealer would probably be allowed to sell another manufacturer's economy cars.
In time, this eroded the manufacturers' power over their dealers -- and more and more dealers basically began selling everything. Detroit had only two options: drop the dealers and create a completely new sales and distribution network or learn to get along with the new power structure. Not wanting to start over, Detroit chose to stay with the existing dealer network.
The result? Detroit now finds itself dealing with nationwide chains of mega-dealers. For these retailers, the only brand that matters is the one serving their purposes at a particular moment. If there's a new model at Ford that the buying public doesn't like, a dealer can seamlessly shift to selling "better" Chevrolets, Dodges or Hyundais.
For the mega, it's no problem. Customers will still buy, revenue will continue to come in, and the dealership will continue to grow. But what about Ford? The company has borne the risk of developing new products, dealt with the lawyers and government safety inspectors, spent tens of millions on engineering tests and designs, conducted thousands of hours of costly market research, sourced new parts from suppliers and retooled its manufacturing processes.
but because Ford can't influence its big distributors in a meaningful way, it has no margin for error in anticipating customer tastes. If it brings out a car that isn't popular, it can't force the dealer network to carry the car and try to sell it.
Ford says that the dealership picture is more complex than presented here. The current system evolved, the company says, because of a number of factors -- driven by car companies, dealers and state laws. Moreover, the company notes, dealers who are awarded a Ford, Lincoln or Mercury franchise offer a full line of the brand's merchandise in their showrooms as part of their franchising agreement.
The company also argues that it is being aggressive about delivering "more of the products customers really want, including new cars, crossovers and trucks that feature advancements in safety, quality, environmental innovation and design."
Staying in Control
How do manufacturers avoid the distribution trap? Follow the example of companies such as Harley-Davidson Inc. and Caterpillar Inc., which have recognized the critical importance of controlling what happens to their products throughout the sales and distribution chain. And that means they have used the creative energy of their employees to benefit their own stakeholders, rather than those of the mass marketers.
One way for a growing company to avoid the influence of the megas is through smart acquisitions. Instead of placing products in a big retailer to boost volume, a company could acquire other businesses that have strong ties to independent distributors. That way, even if the company's core business must work with the megas, its other product lines can grow outside their influence.
Still, controlling distribution doesn't necessarily mean avoiding big distributors entirely. If companies must deal with retail giants, they should push for favorable terms -- ideally, working with them as truly equal partners.
Take Nike Inc.'s relationship with the big athletic retailer Foot Locker Inc. The companies are teaming up to launch a network of specialty basketball stores called House of Hoops by Foot Locker, which will sell only Nike products. The move served Nike's larger strategy of targeting core consumer segments.
Finally, controlling distribution may mean selling directly to customers. This can take a number of forms. The most expensive -- and risky -- is setting up proprietary outlets. Nike, for instance, operates a variety of company stores along with House of Hoops.
Of course, most companies won't have the means to create retail stores. Fortunately, the Internet and other technologies have made it simple to sell directly to customers.
Striking a Balance
Consider Step2 Co., a maker of toddler and preschool play products and home-and-garden products that Mr. Murdough founded after leaving Little Tikes. For years, the toy maker has been striking a delicate balance between selling through the megas and selling directly to customers.
The company, owned by private-equity firm Liberty Partners, sells many products through mass retailers, which helps build brand awareness. But Step2 keeps its newest innovations close to the vest. It often offers them exclusively through the company's Web site and independent retailers that support the complete line. Only much later -- after the products' novelty value has worn off -- does Step2 offer them through outside retailers.
For instance, the company launched the LifeStyle Deluxe Kitchen and LifeStyle Grand Walk-In Kitchen play sets as exclusives on the Web. After a year or so, they moved into wider release.
In conclusion, selling through the megas is almost irresistible for most firms. But before producers fall into the arms of the mass marketers, they should consider whether the benefits outweigh the risk of losing control over their products, processes and internal operations.
Times Kills TimesSelect: What It Means for Magazines
BoSacks Speaks Out:
I don't think this move means anything specific to any single publisher. Publishing today is all about niche. The NYT is in the very broad and global niche of world news delivery. Most magazine publishers are not in that particular information boat.
The stronger, more focused your editorial(niche) the stronger your franchise is. Publishers with robust online sites should continue to prosper relative to the value of their content to the reader. If you build a sustainable editorial product of excellence you should continue prosper. Here is a simple formula. CGE & CR = CSR
Continuously Great Edit which delivers a Committed Readership equals Consistent and Sustainable Revenue.
"A satisfied customer is the best business strategy of all."
Michael Leboeuf quotes
Times Kills TimesSelect: What It Means for Magazines
Posted by: Dylan Stableford
http://www.foliomag.com/page.asp?prmID=273&dspMore=1&prmPID=142&showmonth=9#142
The New York Times today announced that it will drop its paid online subscription program, TimesSelect, effectively admitting its two-year attempt to charge its Web site users to access premium content and archives had failed.
TimesSelect, which charged $49.95 per year ($7.95 a month) for access to its columnists and the newspaper's archives, drew an estimated 227,000 paid subscribers and $10 million in annual revenue. Beginning at midnight, the newspaper will open up access to its entire site to readers. So what changed?
Many more readers started coming to the site from search engines and links on other sites instead of coming directly to NYTimes.com. These indirect readers, unable to get access to articles behind the pay wall and less likely to pay subscription fees than the more loyal direct users, were seen as opportunities for more page views and increased advertising revenue.
According to Nielsen/NetRatings, NYTimes.com traffic sees roughly 13
million unique visitors each month, and could explode without a wall, according to industry observers. The crumbling of the Times subscription modelleaves the Wall Street Journal as only major newspaper in the country to charge for access to most of its Web site, generating $65 million in revenue, according to the Times.
So what does this mean for magazine publishers? Consumer Reports, one of the few remaining magazines to charge for access to its site, is nearing three million paid subscribers to its Web site. (Most subscriptions cost $26/year.)
But for most consumer magazines, the free model dominates the industry. Why? Because it comes down to readers - which is why magazine industry consultant Bob Sacks likes the Times move.
"They are thinking long term and this move will continue to protect and promote the Times brand, and at the same time cultivate new readership," Sacks wrote in an e-mail. "After all sustained loyal readership is the bedrock of any publishing empire, be it large or small. If you don't have readers, exactly what do you have?"
------------------------------------------------
Murdoch makes case for free WSJ online
By Kenneth Li
NEW YORK (Reuters) - News Corp chief Rupert Murdoch on Tuesday sketched out early plans for Dow Jones & Co Inc, saying he leaned toward making the online Wall Street Journal free but had not yet made a decision.
Murdoch also projected about $100 million in cost savings, or double the amount earlier anticipated, saying he had identified "low-hanging fruit." His $5.6 billion purchase of the publisher of the Wall Street Journal is expected to close in about two months.
Murdoch said he saw opportunities to increase growth at Dow Jones. Like the rest of the publishing industry, Dow Jones has been grappling with slowing advertising growth.
"Dow Jones presents a great challenge," Murdoch told the Goldman Sachs Communacopia conference. "We think there are enormous opportunities ... We're about expanding revenue."
He also talked about building a closer relationship between the Journal and Dow Jones Newswires, which compete with Reuters and Bloomberg.
"Between the two, you have 1,600 journalists. That's a lot of journalists. There's a huge resource there to build on," Murdoch said.
He reiterated his proposal to make the Wall Street Journal's Web site free, rejecting criticism that it would hurt the newspaper. Analysts have said a free wsj.com could be a risky move as the site is a rare Internet property that has managed to attract paying customers.
Murdoch said making the site, which currently charges a annual subscription fee of $99, freely available online would help boost viewership and revenue globally.
"Will you lose $50 million to $100 million in revenue? I don't think so," Murdoch said. "If the site is good, you'll get much more."
His comments came a day after the New York Times Co said it would end its paid TimesSelect service to attract more online ads.
FOX BUSINESS NETWORK
Dow Jones resources are expected to contribute to News Corp's Fox Business Network, seen as a potentially strong rival to General Electric's CNBC. It launches on October 15.
Murdoch said he envisioned a network that would look very different from the reigning cable business news network, which also competes with Bloomberg television.
"CNBC is a financial news network for Wall Street," he said. "We're for Main Street."
Analysts have questioned whether there is a large enough audience to support a third business news network, especially after Time Warner Inc's CNN closed its financial channel several years ago.
Murdoch said he faced a similar criticism when he started the Fox television network and when he launched Fox News, which became the top cable news channel by viewership and whose advertising growth contributes to News Corp's bottom line.
"When I started Fox News, everyone considered me to be an idiot, spending $1 billion," he said. "It's now worth $10 billion."
Although the Journal is locked in a deal with CNBC through 2011 forbidding Journal reporters from appearing on the new Fox Business Network, Murdoch said the paper can still contribute its coverage of politics, national and international affairs, and lifestyle news.
"And we'll have that in another four years," Murdoch said.
On Tuesday, Fox Business Network added four more anchors to its roster of four other Fox News veterans.
The new hires are Peter Barnes, a former Washington D.C. correspondent for CNBC who most recently was a Washington bureau chief for Hearst-Argyle; Jenna Lee, a former news anchor and reporter for Forbes.com; Nicole Petallides from Bloomberg Television; and Cody Willard, a columnist for The Financial Times.
I don't think this move means anything specific to any single publisher. Publishing today is all about niche. The NYT is in the very broad and global niche of world news delivery. Most magazine publishers are not in that particular information boat.
The stronger, more focused your editorial(niche) the stronger your franchise is. Publishers with robust online sites should continue to prosper relative to the value of their content to the reader. If you build a sustainable editorial product of excellence you should continue prosper. Here is a simple formula. CGE & CR = CSR
Continuously Great Edit which delivers a Committed Readership equals Consistent and Sustainable Revenue.
"A satisfied customer is the best business strategy of all."
Michael Leboeuf quotes
Times Kills TimesSelect: What It Means for Magazines
Posted by: Dylan Stableford
http://www.foliomag.com/page.asp?prmID=273&dspMore=1&prmPID=142&showmonth=9#142
The New York Times today announced that it will drop its paid online subscription program, TimesSelect, effectively admitting its two-year attempt to charge its Web site users to access premium content and archives had failed.
TimesSelect, which charged $49.95 per year ($7.95 a month) for access to its columnists and the newspaper's archives, drew an estimated 227,000 paid subscribers and $10 million in annual revenue. Beginning at midnight, the newspaper will open up access to its entire site to readers. So what changed?
Many more readers started coming to the site from search engines and links on other sites instead of coming directly to NYTimes.com. These indirect readers, unable to get access to articles behind the pay wall and less likely to pay subscription fees than the more loyal direct users, were seen as opportunities for more page views and increased advertising revenue.
According to Nielsen/NetRatings, NYTimes.com traffic sees roughly 13
million unique visitors each month, and could explode without a wall, according to industry observers. The crumbling of the Times subscription modelleaves the Wall Street Journal as only major newspaper in the country to charge for access to most of its Web site, generating $65 million in revenue, according to the Times.
So what does this mean for magazine publishers? Consumer Reports, one of the few remaining magazines to charge for access to its site, is nearing three million paid subscribers to its Web site. (Most subscriptions cost $26/year.)
But for most consumer magazines, the free model dominates the industry. Why? Because it comes down to readers - which is why magazine industry consultant Bob Sacks likes the Times move.
"They are thinking long term and this move will continue to protect and promote the Times brand, and at the same time cultivate new readership," Sacks wrote in an e-mail. "After all sustained loyal readership is the bedrock of any publishing empire, be it large or small. If you don't have readers, exactly what do you have?"
------------------------------------------------
Murdoch makes case for free WSJ online
By Kenneth Li
NEW YORK (Reuters) - News Corp chief Rupert Murdoch on Tuesday sketched out early plans for Dow Jones & Co Inc, saying he leaned toward making the online Wall Street Journal free but had not yet made a decision.
Murdoch also projected about $100 million in cost savings, or double the amount earlier anticipated, saying he had identified "low-hanging fruit." His $5.6 billion purchase of the publisher of the Wall Street Journal is expected to close in about two months.
Murdoch said he saw opportunities to increase growth at Dow Jones. Like the rest of the publishing industry, Dow Jones has been grappling with slowing advertising growth.
"Dow Jones presents a great challenge," Murdoch told the Goldman Sachs Communacopia conference. "We think there are enormous opportunities ... We're about expanding revenue."
He also talked about building a closer relationship between the Journal and Dow Jones Newswires, which compete with Reuters and Bloomberg.
"Between the two, you have 1,600 journalists. That's a lot of journalists. There's a huge resource there to build on," Murdoch said.
He reiterated his proposal to make the Wall Street Journal's Web site free, rejecting criticism that it would hurt the newspaper. Analysts have said a free wsj.com could be a risky move as the site is a rare Internet property that has managed to attract paying customers.
Murdoch said making the site, which currently charges a annual subscription fee of $99, freely available online would help boost viewership and revenue globally.
"Will you lose $50 million to $100 million in revenue? I don't think so," Murdoch said. "If the site is good, you'll get much more."
His comments came a day after the New York Times Co said it would end its paid TimesSelect service to attract more online ads.
FOX BUSINESS NETWORK
Dow Jones resources are expected to contribute to News Corp's Fox Business Network, seen as a potentially strong rival to General Electric's CNBC. It launches on October 15.
Murdoch said he envisioned a network that would look very different from the reigning cable business news network, which also competes with Bloomberg television.
"CNBC is a financial news network for Wall Street," he said. "We're for Main Street."
Analysts have questioned whether there is a large enough audience to support a third business news network, especially after Time Warner Inc's CNN closed its financial channel several years ago.
Murdoch said he faced a similar criticism when he started the Fox television network and when he launched Fox News, which became the top cable news channel by viewership and whose advertising growth contributes to News Corp's bottom line.
"When I started Fox News, everyone considered me to be an idiot, spending $1 billion," he said. "It's now worth $10 billion."
Although the Journal is locked in a deal with CNBC through 2011 forbidding Journal reporters from appearing on the new Fox Business Network, Murdoch said the paper can still contribute its coverage of politics, national and international affairs, and lifestyle news.
"And we'll have that in another four years," Murdoch said.
On Tuesday, Fox Business Network added four more anchors to its roster of four other Fox News veterans.
The new hires are Peter Barnes, a former Washington D.C. correspondent for CNBC who most recently was a Washington bureau chief for Hearst-Argyle; Jenna Lee, a former news anchor and reporter for Forbes.com; Nicole Petallides from Bloomberg Television; and Cody Willard, a columnist for The Financial Times.
Tuesday, September 18, 2007
BoSacks Speaks Out: Is Anyone in Control Here?
BoSacks Speaks Out: Is Anyone in Control Here?
By BoSacks
Publishing Executive Magazine
http://www.pubexec.com/story/story.bsp?sid=75521&var=story
When it comes to today's newsstand, someone is in control. But it isn't you.
How many magazines fit on the head of a pin? Just a silly metaphysical question you say? Perhaps, but that question might have real significance in today's magazine marketplace-specifically, the newsstand business and the seemingly unlimited amount of opinions and business models that are being discussed, dissected and, if you will pardon the expression, distributed among all the trades, blogs and water coolers of the publishing world.
I know you've heard the scuttlebutt before-the newsstand model is broken, or the newsstand has been flat for 15 years, or my current favorite, Samir Husni's July 24 blog entry, "Wholesalers Are Not Dying . . . They Are Committing Suicide" (www.MrMagazine.com).
What the heck is going on, and is anyone in control here?
The simple answer is yes, but it isn't you. The consumer is now in control. The best you can do is to try to gather a semblance of order (not control) and deliver the goods the consumer actually wants, on any platform that they want it.
What is it that the consumer wants? It's what they've never had before: choices. And when I say choices, I don't mean which of the 7,000 printed consumer titles they should buy, borrow or steal. I mean choices of media involvement.
It is this new series of endless mixed-media choices and the ability to be a member of a group drilled down to a niche of one that should be at the crux of all our publishing newsstand discussions. How can print publishers establish a viable and sustainable niche mentality in an increasingly selective and seductive electronic world, while at the same time becoming as cost efficient and accountable as other media?
This new era of communication has completely changed the old concept of mass distribution. Mass-produced, general-interest titles are dying right before our eyes.
I am not saying the vibrant world of printed magazines is vanishing, but rather that the elephantine, slow-to-distribute, one-magazine-fits-all is a disappearing breed. And so is the business model that supported it. Large circulation numbers hide lots of inefficiencies that cannot/will not be duplicated as circulations reach lower, but more sustainable levels. In the new world of digital-advertising accountability, the ancient analog mad scramble for absurd, faux rate-base numbers and newsstand/subscription giveaways will soon reach the inevitable conclusion of death by abuse.
OLD-STYLE PUBLISHING: THOSE DAYS ARE OVER
All our problems can be distilled down to one concept: Who rules the roost-advertisers or consumers? Since, in today's world, the consumer rules, those magazines whose primary goal is to please the advertiser are proving to be the quickest to croak. This style of publishing worked when the big titles had mass reach, and when they didn't have much in the way of real media competition.
Today, we also should not discuss major changes in just a single part of the distribution/circulation/newsstand model. The newsstand model should not be discussed without the subscription model. As the circulation numbers of large titles continue to plummet, the compulsion to maintain rate base becomes a dangerous obsession, sometimes obscuring reasonable accountability. This industry can no longer afford inappropriate corporate behavior in search of maintaining the increasingly false god of rate base.
Bob Sacks (aka BoSacks) is a consultant to the printing/publishing industry and president of The Precision Media Group (www.BoSacks.com). He is publisher and editor of a daily, international e-newsletter, Heard on the Web. Sacks has held posts as director of manufacturing and distribution, senior sales manager (paper), chief of operations, pressman, cameraman and corporate janitor.
By BoSacks
Publishing Executive Magazine
http://www.pubexec.com/story/story.bsp?sid=75521&var=story
When it comes to today's newsstand, someone is in control. But it isn't you.
How many magazines fit on the head of a pin? Just a silly metaphysical question you say? Perhaps, but that question might have real significance in today's magazine marketplace-specifically, the newsstand business and the seemingly unlimited amount of opinions and business models that are being discussed, dissected and, if you will pardon the expression, distributed among all the trades, blogs and water coolers of the publishing world.
I know you've heard the scuttlebutt before-the newsstand model is broken, or the newsstand has been flat for 15 years, or my current favorite, Samir Husni's July 24 blog entry, "Wholesalers Are Not Dying . . . They Are Committing Suicide" (www.MrMagazine.com).
What the heck is going on, and is anyone in control here?
The simple answer is yes, but it isn't you. The consumer is now in control. The best you can do is to try to gather a semblance of order (not control) and deliver the goods the consumer actually wants, on any platform that they want it.
What is it that the consumer wants? It's what they've never had before: choices. And when I say choices, I don't mean which of the 7,000 printed consumer titles they should buy, borrow or steal. I mean choices of media involvement.
It is this new series of endless mixed-media choices and the ability to be a member of a group drilled down to a niche of one that should be at the crux of all our publishing newsstand discussions. How can print publishers establish a viable and sustainable niche mentality in an increasingly selective and seductive electronic world, while at the same time becoming as cost efficient and accountable as other media?
This new era of communication has completely changed the old concept of mass distribution. Mass-produced, general-interest titles are dying right before our eyes.
I am not saying the vibrant world of printed magazines is vanishing, but rather that the elephantine, slow-to-distribute, one-magazine-fits-all is a disappearing breed. And so is the business model that supported it. Large circulation numbers hide lots of inefficiencies that cannot/will not be duplicated as circulations reach lower, but more sustainable levels. In the new world of digital-advertising accountability, the ancient analog mad scramble for absurd, faux rate-base numbers and newsstand/subscription giveaways will soon reach the inevitable conclusion of death by abuse.
OLD-STYLE PUBLISHING: THOSE DAYS ARE OVER
All our problems can be distilled down to one concept: Who rules the roost-advertisers or consumers? Since, in today's world, the consumer rules, those magazines whose primary goal is to please the advertiser are proving to be the quickest to croak. This style of publishing worked when the big titles had mass reach, and when they didn't have much in the way of real media competition.
Today, we also should not discuss major changes in just a single part of the distribution/circulation/newsstand model. The newsstand model should not be discussed without the subscription model. As the circulation numbers of large titles continue to plummet, the compulsion to maintain rate base becomes a dangerous obsession, sometimes obscuring reasonable accountability. This industry can no longer afford inappropriate corporate behavior in search of maintaining the increasingly false god of rate base.
Bob Sacks (aka BoSacks) is a consultant to the printing/publishing industry and president of The Precision Media Group (www.BoSacks.com). He is publisher and editor of a daily, international e-newsletter, Heard on the Web. Sacks has held posts as director of manufacturing and distribution, senior sales manager (paper), chief of operations, pressman, cameraman and corporate janitor.
The Future of News Is 'Small'
The Future of News Is 'Small'
by Max Kalehoff
http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=67437
What will newspapers look like in 2020? That's the burning question a number of people have been tackling lately, including Buzzmachine's Jeff Jarvis, fellow Spin columnist Dave Morgan and Businessweek's Stephen Baker.
Jarvis says that: "By 2020, we had better hope that newspapers aren't just papers anymore but are valued members of larger networks that enable their communities to gather, share, and make sense of the news they need."
Morgan says that: "I very much doubt that folks in major metropolitan markets in the U.S. will wake up daily to the sound of print newspapers hitting their doorstep. The metro newspaper as we know it will not exist in large markets, and will probably not exist in the same way in many smaller markets as well. However, I do believe that there will be many large and very robust local news, information and advertising media products; probably, in fact, many, many more of them than we have today, particularly in large metro markets."
Finally, Baker says that: "Editors will go the way of the linotype machine. Increasingly, human editing will be viewed as an expense and a delay that few can afford. Algorithms, editing software and seach engines will handle much of the work. Communities will bounce around the stories and edit in their own way. In this sense, newspapers will become more like blogs...This represents a shift in power within journalism. Editors long ran things. Editing was management. It was upward mobility. More money. Reporters who didn't switch to editing by their '40s were often considered quirky, and lacking in ambition. That's no longer the case."
I agree with all three of them to a large degree -- and especially the unequivocal assertion that the Internet is driving this bus. But for whatever erosion takes place -- be it the physical paper, classified ads, editors or equity of old news brands -- I believe the importance of the individual reporter, or voice, will inversely rise. And it all comes down to trust and accessibility.
Don't get me wrong; big news companies are tremendously powerful. But big picture, trust in big institutions -- along with their brands -- is being challenged. People increasingly look to other people like themselves for information, recommendations, comfort, reassurance and guidance on how to live life. The erosion of trust and image in big institutions is inherent in corporations, government, advertising, religious bodies, and...the news business. (Two great resources on this topic are Edelman's Trust Barometer and Gallup's annual rating of the images of 25 business and industry sectors.)
I believe if we are in a long-term period of eroding trust in what's big and institutional, then we're bound to enter a period of intense consciousness and value over what's small. What's small is accessible, tangible and compatible with "us people."
When it comes to consuming what's newsworthy, the individual reporter and people brands will become more important. In fact, Jarvis, Morgan and Baker are all perfect examples of this phenomenon in my own news and information consumption. Just look at my blogroll, which I publish openly on my own blog.
I believe the investments and scale that big news brands achieve will remain important in 2020. However, they will need to reconcile with the eventual, dominant attribute we now call small.
Regardless, this period will bring tremendous opportunity for entrepreneurial, independent, innovative thinkers to shape what does become the news business. The big's monopoly on the ability to shape the future of the news business -- or push the status quo -- is declining rapidly.
What do you think?
by Max Kalehoff
http://publications.mediapost.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=67437
What will newspapers look like in 2020? That's the burning question a number of people have been tackling lately, including Buzzmachine's Jeff Jarvis, fellow Spin columnist Dave Morgan and Businessweek's Stephen Baker.
Jarvis says that: "By 2020, we had better hope that newspapers aren't just papers anymore but are valued members of larger networks that enable their communities to gather, share, and make sense of the news they need."
Morgan says that: "I very much doubt that folks in major metropolitan markets in the U.S. will wake up daily to the sound of print newspapers hitting their doorstep. The metro newspaper as we know it will not exist in large markets, and will probably not exist in the same way in many smaller markets as well. However, I do believe that there will be many large and very robust local news, information and advertising media products; probably, in fact, many, many more of them than we have today, particularly in large metro markets."
Finally, Baker says that: "Editors will go the way of the linotype machine. Increasingly, human editing will be viewed as an expense and a delay that few can afford. Algorithms, editing software and seach engines will handle much of the work. Communities will bounce around the stories and edit in their own way. In this sense, newspapers will become more like blogs...This represents a shift in power within journalism. Editors long ran things. Editing was management. It was upward mobility. More money. Reporters who didn't switch to editing by their '40s were often considered quirky, and lacking in ambition. That's no longer the case."
I agree with all three of them to a large degree -- and especially the unequivocal assertion that the Internet is driving this bus. But for whatever erosion takes place -- be it the physical paper, classified ads, editors or equity of old news brands -- I believe the importance of the individual reporter, or voice, will inversely rise. And it all comes down to trust and accessibility.
Don't get me wrong; big news companies are tremendously powerful. But big picture, trust in big institutions -- along with their brands -- is being challenged. People increasingly look to other people like themselves for information, recommendations, comfort, reassurance and guidance on how to live life. The erosion of trust and image in big institutions is inherent in corporations, government, advertising, religious bodies, and...the news business. (Two great resources on this topic are Edelman's Trust Barometer and Gallup's annual rating of the images of 25 business and industry sectors.)
I believe if we are in a long-term period of eroding trust in what's big and institutional, then we're bound to enter a period of intense consciousness and value over what's small. What's small is accessible, tangible and compatible with "us people."
When it comes to consuming what's newsworthy, the individual reporter and people brands will become more important. In fact, Jarvis, Morgan and Baker are all perfect examples of this phenomenon in my own news and information consumption. Just look at my blogroll, which I publish openly on my own blog.
I believe the investments and scale that big news brands achieve will remain important in 2020. However, they will need to reconcile with the eventual, dominant attribute we now call small.
Regardless, this period will bring tremendous opportunity for entrepreneurial, independent, innovative thinkers to shape what does become the news business. The big's monopoly on the ability to shape the future of the news business -- or push the status quo -- is declining rapidly.
What do you think?
"Dr. Evil" Moves To Maxim
"Dr. Evil" Moves To Maxim
Quadrangle Group's Kent Brownridge is chasing the same reader as Rolling Stone
By Jon Fine
http://www.businessweek.com/magazine/content/07_39/b4051023.htm
The rap on Kent Brownridge, who's running Maxim for private equity player Quadrangle Group, is that he's unusually smart and unusually ferocious. And that the latter overshadowed the former during his long tenure as Jann Wenner's No. 2 at Wenner Media.
"If you get in his way, he will roll right over you," says a former Wenner executive, and this is one who claims to be a fan. In person, Brownridge can come off like The Simpsons' magnate Montgomery Burns or former Senator Robert Dole at his most saturnine. That he can do so with a certain deadpan glee earned him the joshing tag "Dr. Evil" from ex-employee and Ad Age columnist Simon Dumenco. Still, sometimes you sensed his subordinates' raw animal fear. Some years ago, I was interviewing him in his office, and he needed some scraps of data that he (atypically) did not know offhand. So he punched a button on his phone. "Tell [redacted] I need to see him," Brownridge snarled at an assistant via squawk box, "and tell him I am NOT HAPPY."
Approximately 18 seconds later, said executive stood in the doorway, wearing a wary and likely very familiar expression.
AFTER 31 YEARS, in early 2006, Brownridge left Wenner. He insists it was his idea; few observers agree. Through a spokesman, Jann Wenner says: "It was both retirement time"-Brownridge was 65-"and a mutual parting of the ways that I think we both recognized was due." (Precisely what happened remains opaque. But Wenner threw Brownridge a party at the Four Seasons-and Wenner Media is a company where pushed-out executives, as one insider puts it, end up at the bottom of an airshaft, not hearing toasts at a landmark restaurant.) Following a brief, unhappy retirement, Brownridge hooked on with Quadrangle. The just-completed purchase of Dennis Publishing's Maxim and music magazine sibling Blender, under the newly formed Alpha Media Group, leaves Brownridge chasing the same young male reader as Wenner flagship Rolling Stone. This has spurred talk of revenge. But the Dennis deal is one of four that Brownridge has bid on; another was regional high-end publisher Modern Luxury, which doesn't exactly target Bud-swilling twentysomethings. Then again, Brownridge has already poached James Kaminsky from Wenner title Men's Journal to edit Maxim. (Jann Wenner would not comment on competitive issues beyond saying he's "very happy to see Kent back in the game.")
In his new corner office-which sports portraits of Steve Jobs, P.T. Barnum, Lee Iacocca, and Sun Tzu-Brownridge says that Blender's circulation could easily rise from its current 825,000 to 1 million and promises to increase his company's head count by 20%. (At the existing mags, that is: Brownridge shuttered lagging lad title Stuff.) While he offered few specifics for reigniting Maxim's turbojets, which have cooled, a parsing of his comments strongly suggests that Maxim will feature a lusher look and design and a rethought business approach. "You can't run a magazine company on 'Hey, come to our Super Bowl party,'" he says, referring to a notorious annual Maxim rite. (Although cynics may cite the juice Vanity Fair squeezes from its annual Oscar-night bash and beg to differ.)
As for his rep, Brownridge professes no regrets. "I ran [Wenner Media] like it was my own. Any attack, I took personally. I hit back hard. I am not going to apologize for any of that." While he hasn't mellowed at 67, he insists he's refocusing. Given a chance to dump on his medium's peers, he demurs. "This is the new me. And I am not going to answer. The old me probably would have said something terrible....I haven't got time for anything except work." With that work, Brownridge (along with Mary Berner, the former Condé Naster who now runs Reader's Digest Assn. for Ripplewood Holdings) will demonstrate what private equity ownership of big and famous consumer magazines means. I remain glad I do not hear his voice crackle over an interoffice line, but I look forward to watching how Brownridge will fare. Preferably from a safe distance.
Quadrangle Group's Kent Brownridge is chasing the same reader as Rolling Stone
By Jon Fine
http://www.businessweek.com/magazine/content/07_39/b4051023.htm
The rap on Kent Brownridge, who's running Maxim for private equity player Quadrangle Group, is that he's unusually smart and unusually ferocious. And that the latter overshadowed the former during his long tenure as Jann Wenner's No. 2 at Wenner Media.
"If you get in his way, he will roll right over you," says a former Wenner executive, and this is one who claims to be a fan. In person, Brownridge can come off like The Simpsons' magnate Montgomery Burns or former Senator Robert Dole at his most saturnine. That he can do so with a certain deadpan glee earned him the joshing tag "Dr. Evil" from ex-employee and Ad Age columnist Simon Dumenco. Still, sometimes you sensed his subordinates' raw animal fear. Some years ago, I was interviewing him in his office, and he needed some scraps of data that he (atypically) did not know offhand. So he punched a button on his phone. "Tell [redacted] I need to see him," Brownridge snarled at an assistant via squawk box, "and tell him I am NOT HAPPY."
Approximately 18 seconds later, said executive stood in the doorway, wearing a wary and likely very familiar expression.
AFTER 31 YEARS, in early 2006, Brownridge left Wenner. He insists it was his idea; few observers agree. Through a spokesman, Jann Wenner says: "It was both retirement time"-Brownridge was 65-"and a mutual parting of the ways that I think we both recognized was due." (Precisely what happened remains opaque. But Wenner threw Brownridge a party at the Four Seasons-and Wenner Media is a company where pushed-out executives, as one insider puts it, end up at the bottom of an airshaft, not hearing toasts at a landmark restaurant.) Following a brief, unhappy retirement, Brownridge hooked on with Quadrangle. The just-completed purchase of Dennis Publishing's Maxim and music magazine sibling Blender, under the newly formed Alpha Media Group, leaves Brownridge chasing the same young male reader as Wenner flagship Rolling Stone. This has spurred talk of revenge. But the Dennis deal is one of four that Brownridge has bid on; another was regional high-end publisher Modern Luxury, which doesn't exactly target Bud-swilling twentysomethings. Then again, Brownridge has already poached James Kaminsky from Wenner title Men's Journal to edit Maxim. (Jann Wenner would not comment on competitive issues beyond saying he's "very happy to see Kent back in the game.")
In his new corner office-which sports portraits of Steve Jobs, P.T. Barnum, Lee Iacocca, and Sun Tzu-Brownridge says that Blender's circulation could easily rise from its current 825,000 to 1 million and promises to increase his company's head count by 20%. (At the existing mags, that is: Brownridge shuttered lagging lad title Stuff.) While he offered few specifics for reigniting Maxim's turbojets, which have cooled, a parsing of his comments strongly suggests that Maxim will feature a lusher look and design and a rethought business approach. "You can't run a magazine company on 'Hey, come to our Super Bowl party,'" he says, referring to a notorious annual Maxim rite. (Although cynics may cite the juice Vanity Fair squeezes from its annual Oscar-night bash and beg to differ.)
As for his rep, Brownridge professes no regrets. "I ran [Wenner Media] like it was my own. Any attack, I took personally. I hit back hard. I am not going to apologize for any of that." While he hasn't mellowed at 67, he insists he's refocusing. Given a chance to dump on his medium's peers, he demurs. "This is the new me. And I am not going to answer. The old me probably would have said something terrible....I haven't got time for anything except work." With that work, Brownridge (along with Mary Berner, the former Condé Naster who now runs Reader's Digest Assn. for Ripplewood Holdings) will demonstrate what private equity ownership of big and famous consumer magazines means. I remain glad I do not hear his voice crackle over an interoffice line, but I look forward to watching how Brownridge will fare. Preferably from a safe distance.
Sunday, September 16, 2007
BoSacks Speaks Out: Words on The Street
BoSacks Speaks Out: Words on The Street
This is brilliant. Here is a note from our friends up north about the Canadian magazine industry promoting itself and the act of reading simultaneously. It is simple. It is cheap. It is elegant and has a small touch of genius. How are they doing that?
With the very product that they distribute. In this blog from Canada is a terrific idea that our own MPA should take and run with. Forget the misplaced, absurd, tired and old 40 million dollar boondoggle of a marketing plan. The MPA should create a magazine traveling road show. Open it up to any and all publishers. The big and the small. Mr. and Ms. Publisher you want readers? Here is a good idea . . . Go out and get them.
"Success is more a function of consistent common sense than it is of genius."
An Wang quotes (Chinese born American Computer engineer and Inventor, 1920-1990)
Word on the Street, where magazines come out to meet the public
In most places in Canada, the end of September has a crisp feel of autumn about it, which is ideal for Word on the Street (though Toronto can sometimes surprise with a heat wave). And this annual celebration of the written word (now in its 18th year) seems to have become an important part of marketing consumer magazines in this country -- both selling subs and single copies and raising brand awareness among the general public.
Visitors can number in the thousands in smaller venues (Kitchener and Halifax) and in the tens of thousands in Vancouver and Toronto. While they're there for books and readings and other events, too, it's a great place for magazine staffers to meet the public, maybe sell or give away those back issues, get those sub cards into eager hands and generally feel good about what they do.
The event is a little different from place to place. Only in Vancouver, for instance, is there a "magazine mews" on Howe Street, where magazine booths are clustered together. Only in Toronto do the big guys, Rogers and Transcontinental, set up shop. In some places it is really on a city street, in others it is in a more parklike setting (Queen's Park in Toronto, Victoria Park in Kitchener). Curiously, there are some major cities where it hasn't taken yet, like Ottawa and Montreal and Winnipeg and Regina, Calgary, St. John's and Saint John.
What's amazing is that even more magazines don't make the effort, taking advantage of the national promotion and aggressively associating themselves with the event. We have heard that some magazines find writers, sell subs and make friends in a way that hard to replicate. There's a modest cost for a booth, but some magazines split this with another title.
Just for interest, here are the magazines and magazine-related organizations and companies that we found were registered as of today (more are likely to come) in the various places across the country.
Halifax (September 23)
Atlantic Magazine Association
Magazines Canada
Saltscapes
The Walrus
Kitchener (September 30)
The New Quarterly
Alternatives Journal
Canadian Humanist
Vida Latina Magazine
Toronto (September 30)
Alternatives Journal
Ascent magazine
Brick, a literary journal
Broken Pencil
Canadian Art
Canadian Geographic
Canadian Newcomer Chart magazine
Chatelaine
cineAction
Descant
Existere
Eye Weekly
Ideas: Arts & Sciences Review
Kiss Machine
Literary Review of Canada
Magazines Canada
Moorshead Magazines
Musicworks magazine
New Internationalist
NOW magazine
Outpost
Owl & Chickadee
Public
Rogers Publishing
Shameless
SkyNews Spacing
Taddle Creek
The Magazine
The New Quarterly
The Walrus Foundation
This Magazine
Transcontinental Media
What's Up Kids Family Magazine
Calgary (September 30)
Calgary Inc. Avenue Magazine
The Walrus Foundation
Magazines Canada
Venture Publishing (Alberta Venture, Unlimited)
Vancouver (September 30)
alive magazine
British Columbia Association of Magazine Publishers
British Columbia Magazine
CJC: Canadian Journal of Communications
Dance International
Event
FRONT Magazine
Geist magazine,
Homes & Living Magazine
Humanist Perspectives
Magazines Canada
Pacific Rim Magazine Ricepaper Room
subTerrain magazine
Vancouver Review
The Walrus
Watershed Sentinel
This is brilliant. Here is a note from our friends up north about the Canadian magazine industry promoting itself and the act of reading simultaneously. It is simple. It is cheap. It is elegant and has a small touch of genius. How are they doing that?
With the very product that they distribute. In this blog from Canada is a terrific idea that our own MPA should take and run with. Forget the misplaced, absurd, tired and old 40 million dollar boondoggle of a marketing plan. The MPA should create a magazine traveling road show. Open it up to any and all publishers. The big and the small. Mr. and Ms. Publisher you want readers? Here is a good idea . . . Go out and get them.
"Success is more a function of consistent common sense than it is of genius."
An Wang quotes (Chinese born American Computer engineer and Inventor, 1920-1990)
Word on the Street, where magazines come out to meet the public
In most places in Canada, the end of September has a crisp feel of autumn about it, which is ideal for Word on the Street (though Toronto can sometimes surprise with a heat wave). And this annual celebration of the written word (now in its 18th year) seems to have become an important part of marketing consumer magazines in this country -- both selling subs and single copies and raising brand awareness among the general public.
Visitors can number in the thousands in smaller venues (Kitchener and Halifax) and in the tens of thousands in Vancouver and Toronto. While they're there for books and readings and other events, too, it's a great place for magazine staffers to meet the public, maybe sell or give away those back issues, get those sub cards into eager hands and generally feel good about what they do.
The event is a little different from place to place. Only in Vancouver, for instance, is there a "magazine mews" on Howe Street, where magazine booths are clustered together. Only in Toronto do the big guys, Rogers and Transcontinental, set up shop. In some places it is really on a city street, in others it is in a more parklike setting (Queen's Park in Toronto, Victoria Park in Kitchener). Curiously, there are some major cities where it hasn't taken yet, like Ottawa and Montreal and Winnipeg and Regina, Calgary, St. John's and Saint John.
What's amazing is that even more magazines don't make the effort, taking advantage of the national promotion and aggressively associating themselves with the event. We have heard that some magazines find writers, sell subs and make friends in a way that hard to replicate. There's a modest cost for a booth, but some magazines split this with another title.
Just for interest, here are the magazines and magazine-related organizations and companies that we found were registered as of today (more are likely to come) in the various places across the country.
Halifax (September 23)
Atlantic Magazine Association
Magazines Canada
Saltscapes
The Walrus
Kitchener (September 30)
The New Quarterly
Alternatives Journal
Canadian Humanist
Vida Latina Magazine
Toronto (September 30)
Alternatives Journal
Ascent magazine
Brick, a literary journal
Broken Pencil
Canadian Art
Canadian Geographic
Canadian Newcomer Chart magazine
Chatelaine
cineAction
Descant
Existere
Eye Weekly
Ideas: Arts & Sciences Review
Kiss Machine
Literary Review of Canada
Magazines Canada
Moorshead Magazines
Musicworks magazine
New Internationalist
NOW magazine
Outpost
Owl & Chickadee
Public
Rogers Publishing
Shameless
SkyNews Spacing
Taddle Creek
The Magazine
The New Quarterly
The Walrus Foundation
This Magazine
Transcontinental Media
What's Up Kids Family Magazine
Calgary (September 30)
Calgary Inc. Avenue Magazine
The Walrus Foundation
Magazines Canada
Venture Publishing (Alberta Venture, Unlimited)
Vancouver (September 30)
alive magazine
British Columbia Association of Magazine Publishers
British Columbia Magazine
CJC: Canadian Journal of Communications
Dance International
Event
FRONT Magazine
Geist magazine,
Homes & Living Magazine
Humanist Perspectives
Magazines Canada
Pacific Rim Magazine Ricepaper Room
subTerrain magazine
Vancouver Review
The Walrus
Watershed Sentinel
Read any good on-screen digital images lately?
Read any good on-screen digital images lately?
Technology giving us more new ways to read old things
STORY TOOLS
By Lee Gomes, The Wall Street Journal
http://www.rockymountainnews.com/drmn/tech/article/0,2777,DRMN_23910_5694188,00.html
If the Jetsons have taught us anything, it's that in the future, paper will be a thing of the past and everything we read will be on a computer screen.
This isn't just about work. That future is already here, thanks first to word processing and then to the Internet. It's about reading for pleasure, too, the sort done sprawled on the couch with a favorite book or magazine and a cat on the lap.
Most people beyond a certain age would regard reading for pleasure on a computer an oxymoron. The machine is associated with the office, and nothing quite takes your mind off a detective novel than having an e-mail alert pop up. The ergonomics are all wrong, too; the eyes get tired, and even an Aeron chair has nothing on a good recliner.
All this, though, is slowly starting to change. There are new ways to read old things.
Both the Internet Archives (archive.org) and Project Gutenberg (gutenberg.org) allow you to download entire books free, usually those no longer under copyright. The free, not-for-profit Million Book Project is in progress at ulib.org.
The big tech companies have discovered books. Google and Microsoft are busy scanning libraries, putting them on the Web and making them searchable. And when you buy selected titles from online booksellers, you can pay a few dollars more and start reading them right away online.
Newspapers have long made available text searches of old stories. Now, many magazines have digitized archives that present old issues on the screen just as they looked on paper.
The New Yorker has been selling its complete library for two years; the 157 years of Harper's are online free for subscribers. Bondi Publishing soon will market digital versions of old issues of Rolling Stone and Playboy.
Laptops, which you can unplug and haul to the couch, are becoming equal to the task of pleasure reading.
Even better than a laptop for casual reading, at least for books, would be a digital reader the size of a book itself. Alas, there have been so many failed attempts at e-books they've acquired a reputation as a perpetual technology of the future.
But in the past year, an innovative screen technology from E Ink has drawn praise. This display is monochrome and reflects ambient light rather than being backlit like an LCD. While you must be in a bright room for the screen to be easily readable, you can also take it outside in bright sun, where it looks best.
Its resolution is much higher than on a desktop monitor, resulting in smooth text without any jaggy edges. And since you aren't staring into a bright light, your eyes don't get as tired.
Sony has been selling an E Ink-based reader for nearly a year for $300. Amazon is rumored to be preparing its own.
Michael Lesk of Rutgers University said reading researchers like himself know that readers retain information from a screen as well as they do from a printed page. But it's an open question whether the emotional experiences are the same, or whether ink stamped on a piece of paper that you hold in your hands somehow makes more of an impact than ghostly letters on an ever-changing screen.
It is a truth universally unacknowledged that reading a book for pleasure involves a lot of hard work. You must fight to keep it open and pressed flat, and just when you've comfortably arranged everything, you have to turn the page and start all over again.
Naturally, you need to do all this without bothering the cat.
You may not appreciate these difficulties only because you've never had an alternative to a book for comparison. The Sony Reader is slim, light and can be held in one hand. To turn the page, nudge it with your thumb.
Yes, there are things not to like about reading for pleasure on a computer screen. You have to forgo the stories books themselves can tell with all their stains and scribbles. And when you're done reading, you don't get to put another trophy on your bookshelf.
In exchange, though, you get to put an entire bookshelf in your pocket.
Digital reading lists
· To download books for free: Internet Archives (archive.org) and Project Gutenberg (gutenberg.org).
· In progress: Million Book Project (ulib.org).
· Magazine archives: New Yorker (newyorker.com/archive) Harper's (harpers.org/archive)
Technology giving us more new ways to read old things
STORY TOOLS
By Lee Gomes, The Wall Street Journal
http://www.rockymountainnews.com/drmn/tech/article/0,2777,DRMN_23910_5694188,00.html
If the Jetsons have taught us anything, it's that in the future, paper will be a thing of the past and everything we read will be on a computer screen.
This isn't just about work. That future is already here, thanks first to word processing and then to the Internet. It's about reading for pleasure, too, the sort done sprawled on the couch with a favorite book or magazine and a cat on the lap.
Most people beyond a certain age would regard reading for pleasure on a computer an oxymoron. The machine is associated with the office, and nothing quite takes your mind off a detective novel than having an e-mail alert pop up. The ergonomics are all wrong, too; the eyes get tired, and even an Aeron chair has nothing on a good recliner.
All this, though, is slowly starting to change. There are new ways to read old things.
Both the Internet Archives (archive.org) and Project Gutenberg (gutenberg.org) allow you to download entire books free, usually those no longer under copyright. The free, not-for-profit Million Book Project is in progress at ulib.org.
The big tech companies have discovered books. Google and Microsoft are busy scanning libraries, putting them on the Web and making them searchable. And when you buy selected titles from online booksellers, you can pay a few dollars more and start reading them right away online.
Newspapers have long made available text searches of old stories. Now, many magazines have digitized archives that present old issues on the screen just as they looked on paper.
The New Yorker has been selling its complete library for two years; the 157 years of Harper's are online free for subscribers. Bondi Publishing soon will market digital versions of old issues of Rolling Stone and Playboy.
Laptops, which you can unplug and haul to the couch, are becoming equal to the task of pleasure reading.
Even better than a laptop for casual reading, at least for books, would be a digital reader the size of a book itself. Alas, there have been so many failed attempts at e-books they've acquired a reputation as a perpetual technology of the future.
But in the past year, an innovative screen technology from E Ink has drawn praise. This display is monochrome and reflects ambient light rather than being backlit like an LCD. While you must be in a bright room for the screen to be easily readable, you can also take it outside in bright sun, where it looks best.
Its resolution is much higher than on a desktop monitor, resulting in smooth text without any jaggy edges. And since you aren't staring into a bright light, your eyes don't get as tired.
Sony has been selling an E Ink-based reader for nearly a year for $300. Amazon is rumored to be preparing its own.
Michael Lesk of Rutgers University said reading researchers like himself know that readers retain information from a screen as well as they do from a printed page. But it's an open question whether the emotional experiences are the same, or whether ink stamped on a piece of paper that you hold in your hands somehow makes more of an impact than ghostly letters on an ever-changing screen.
It is a truth universally unacknowledged that reading a book for pleasure involves a lot of hard work. You must fight to keep it open and pressed flat, and just when you've comfortably arranged everything, you have to turn the page and start all over again.
Naturally, you need to do all this without bothering the cat.
You may not appreciate these difficulties only because you've never had an alternative to a book for comparison. The Sony Reader is slim, light and can be held in one hand. To turn the page, nudge it with your thumb.
Yes, there are things not to like about reading for pleasure on a computer screen. You have to forgo the stories books themselves can tell with all their stains and scribbles. And when you're done reading, you don't get to put another trophy on your bookshelf.
In exchange, though, you get to put an entire bookshelf in your pocket.
Digital reading lists
· To download books for free: Internet Archives (archive.org) and Project Gutenberg (gutenberg.org).
· In progress: Million Book Project (ulib.org).
· Magazine archives: New Yorker (newyorker.com/archive) Harper's (harpers.org/archive)
Publishing Executive Magazine
Symbiosis or 'Death Spiral'?
By Alex Brown
Publishing Executive Magazine
http://www.pubexec.com
Are we really helping or hurting our printing "partners" in today's publishing world?
Printers often demonstrate a genuine interest in the financial well-being of publishers. They prove this every time they hold or cut prices when a postal or paper increase threatens their customers' profitability. Now, this is not entirely a selfless act on their part. Healthy publishers are essential to the print industry, and after all, we are all in this together.
Or are we? It's common to consider the printer-publisher bond as one of mutual dependence and to note the win-win aspects of what can be called a symbiotic relationship. Each party wants the other to grow and prosper. But what happens to a symbiotic relationship when both industries are losing customers? What happens when growing and prospering are no longer the results of what the two parties can do for each other?
We publishers have done a fine job of reminding printers that the price concession they make today is the only way to obtain our business-now and tomorrow. Growth is implicit in business success, so the printer makes the cuts in hopes of increasing volume. Propping up the publisher is smart strategy, the printer reasons.
Price reductions are also the nearly inevitable consequence of competing for a shrinking pie of work. Although consolidations in the printing industry have reduced the competitive landscape, print volume is going down, so printers must keep on cutting no matter how few rivals they must beat. As long as the presses need to run, work needs to be found.
Publishers aren't pleased to see that they're buying less now. The victory of paying less on a per-page basis is counterbalanced by the fact that less revenue is attached to the lower volume. And the leverage of future growth looks shakier and shakier.
IMPACTS OF A CHANGING LANDSCAPE
And so we face two key types of industry shrinkage. First, there are fewer printers and, to a lesser degree, fewer publishers-each of us has fewer competitors. Second, magazine print volume itself is flat to declining. Individual publishing companies and individual titles may boom a bit, but there is no large-scale, industry-wide growth.
The Internet and a legion of new digital-communication techniques are the obvious cause. Printers lose customers who put material online instead of printing it; publishers lose customers who prefer the dynamically up-to-date and generally free information available online to the printed material they'd have to purchase.
I'll leave the great hand-wringing over this development to others, but it's fair to say that both industries are mature. Publisher and printer have reached an age when significant annual growth is the result of acquisitions, not the flourishing of the garden already planted.
THE WORST-CASE SCENARIO
There is a worst-case scenario that could lie ahead. We publishers could continue to lean harder and harder on printers, seeking a steady stream of price concessions in order for them to get our business. We can claim all we like that it's a partnership we're building, but in fact, we're weakening the printer by using his price cuts to inject an artificial increase in our profitability. It works, of course, on a short-term basis. Eventually, however, the technique initiates what could be called a "death spiral," and our so-called partner can't replace or augment his technology. The printer limps before we do, but we both go down together in the end.
The short-term downside for publishers is small-in return for price reductions, we build somewhat more wobbly businesses. When your publishing economics are based on a cost of goods that saps your supplier's health, you haven't really won; you've exploited a weakness. You can take advantage of your printer's sales anxiety for only so long before service, quality and capabilities begin to suffer. Most important, your company's profitability hinges on artificially depressed prices--prices that may be unsustainably low.
This isn't to say that solid, keen negotiation should go out of style. The improvement in equipment yields means that printers' costs have gone down, and so should our prices. But when price cuts are based on the hope of volume growth or the fear of losing work, they can and do backfire. Printer self-interest should curb this last-ditch sales strategy, but it takes courage that, frankly, some printers can't muster. A cynical publisher can take advantage of a hopeful printer every time.
It's all well and good to say we must be nicer to the printers. But publishers will continue to seek the lowest prevailing price to remain competitive. The twist is, we are converting a mutually beneficial relationship into a parasitic one.
The positive aspects of the symbiotic relationship between printers and publishers could, eventually, erode and largely disappear. We'll move closer to a state of cursory service, bankrupt plants, mediocre quality, and a still smaller set of masochistic vendors.
A stable future depends on keeping both printer and publisher profitable. However, it may be difficult or impossible for two mature industries to maintain that type of interaction.
Printers themselves can take the most important first step by selectively pushing back against extreme publisher demands. And publishers could accept the idea that getting printers to compete for their business shouldn't mean a fight to the death. Of all things, the vendor you choose should emerge the healthiest, not the weakest. For now, we have to trust printers to set reasonable limits on the price cuts they'll make. If they don't, both printer and publisher will trade the benefits of symbiosis for the sad end of a death spiral. PE
Alex Brown is a consultant to magazine publishers specializing in manufacturing and magazine management. She founded her consulting company, Printmark, in 1984, and is a frequent speaker at industry events.
By Alex Brown
Publishing Executive Magazine
http://www.pubexec.com
Are we really helping or hurting our printing "partners" in today's publishing world?
Printers often demonstrate a genuine interest in the financial well-being of publishers. They prove this every time they hold or cut prices when a postal or paper increase threatens their customers' profitability. Now, this is not entirely a selfless act on their part. Healthy publishers are essential to the print industry, and after all, we are all in this together.
Or are we? It's common to consider the printer-publisher bond as one of mutual dependence and to note the win-win aspects of what can be called a symbiotic relationship. Each party wants the other to grow and prosper. But what happens to a symbiotic relationship when both industries are losing customers? What happens when growing and prospering are no longer the results of what the two parties can do for each other?
We publishers have done a fine job of reminding printers that the price concession they make today is the only way to obtain our business-now and tomorrow. Growth is implicit in business success, so the printer makes the cuts in hopes of increasing volume. Propping up the publisher is smart strategy, the printer reasons.
Price reductions are also the nearly inevitable consequence of competing for a shrinking pie of work. Although consolidations in the printing industry have reduced the competitive landscape, print volume is going down, so printers must keep on cutting no matter how few rivals they must beat. As long as the presses need to run, work needs to be found.
Publishers aren't pleased to see that they're buying less now. The victory of paying less on a per-page basis is counterbalanced by the fact that less revenue is attached to the lower volume. And the leverage of future growth looks shakier and shakier.
IMPACTS OF A CHANGING LANDSCAPE
And so we face two key types of industry shrinkage. First, there are fewer printers and, to a lesser degree, fewer publishers-each of us has fewer competitors. Second, magazine print volume itself is flat to declining. Individual publishing companies and individual titles may boom a bit, but there is no large-scale, industry-wide growth.
The Internet and a legion of new digital-communication techniques are the obvious cause. Printers lose customers who put material online instead of printing it; publishers lose customers who prefer the dynamically up-to-date and generally free information available online to the printed material they'd have to purchase.
I'll leave the great hand-wringing over this development to others, but it's fair to say that both industries are mature. Publisher and printer have reached an age when significant annual growth is the result of acquisitions, not the flourishing of the garden already planted.
THE WORST-CASE SCENARIO
There is a worst-case scenario that could lie ahead. We publishers could continue to lean harder and harder on printers, seeking a steady stream of price concessions in order for them to get our business. We can claim all we like that it's a partnership we're building, but in fact, we're weakening the printer by using his price cuts to inject an artificial increase in our profitability. It works, of course, on a short-term basis. Eventually, however, the technique initiates what could be called a "death spiral," and our so-called partner can't replace or augment his technology. The printer limps before we do, but we both go down together in the end.
The short-term downside for publishers is small-in return for price reductions, we build somewhat more wobbly businesses. When your publishing economics are based on a cost of goods that saps your supplier's health, you haven't really won; you've exploited a weakness. You can take advantage of your printer's sales anxiety for only so long before service, quality and capabilities begin to suffer. Most important, your company's profitability hinges on artificially depressed prices--prices that may be unsustainably low.
This isn't to say that solid, keen negotiation should go out of style. The improvement in equipment yields means that printers' costs have gone down, and so should our prices. But when price cuts are based on the hope of volume growth or the fear of losing work, they can and do backfire. Printer self-interest should curb this last-ditch sales strategy, but it takes courage that, frankly, some printers can't muster. A cynical publisher can take advantage of a hopeful printer every time.
It's all well and good to say we must be nicer to the printers. But publishers will continue to seek the lowest prevailing price to remain competitive. The twist is, we are converting a mutually beneficial relationship into a parasitic one.
The positive aspects of the symbiotic relationship between printers and publishers could, eventually, erode and largely disappear. We'll move closer to a state of cursory service, bankrupt plants, mediocre quality, and a still smaller set of masochistic vendors.
A stable future depends on keeping both printer and publisher profitable. However, it may be difficult or impossible for two mature industries to maintain that type of interaction.
Printers themselves can take the most important first step by selectively pushing back against extreme publisher demands. And publishers could accept the idea that getting printers to compete for their business shouldn't mean a fight to the death. Of all things, the vendor you choose should emerge the healthiest, not the weakest. For now, we have to trust printers to set reasonable limits on the price cuts they'll make. If they don't, both printer and publisher will trade the benefits of symbiosis for the sad end of a death spiral. PE
Alex Brown is a consultant to magazine publishers specializing in manufacturing and magazine management. She founded her consulting company, Printmark, in 1984, and is a frequent speaker at industry events.
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