Thursday, February 07, 2008
BoSacks: Why Do Good Magazines Die?
By Bob Sacks
Publishing Executive Magazine
Chuck Townsend, president and CEO of Condé Nast Publications, said in a statement, "Our investment in House & Garden throughout the years has been substantial, and we no longer believe it is a viable business investment for the company." Well, that is surely his call to make, but the public death by hanging of an old and cherished lady of publishing with a fan base of almost a million paid copies a month sets the stage for a review of what constitutes "success" in the magazine world, and, I think, makes a case for the impending doom of megalithic publishing empires.
House & Garden also had about 800 advertising pages per year-better numbers than many of its competitors can boast, and dream numbers for almost any publisher in this day and age. If I had those stats, I guarantee I wouldn't pull the plug, but rather find the leakage in the revenue stream.
I will assume that the operating costs were, from Condé Nast's perspective, too high to handle for long-term sustainability. But what the heck does that mean? To me, it is proof positive that they haven't the slightest idea what it means to be entrepreneurial. The time is now, if ever, for all publishers to focus on the entrepreneurial side of our business.
Sure, there is tough competition out there, and some of that competition is in the house of Condé Nast itself. So, what? What better way to command the market than to establish a beachhead with your own titles? And that's the thing-large corporations can't/don't/won't be fast, smart and agile. The fire of quick action is not in the belly of the corporate beast. And in today's world, corporate speed means life.
Condé Nast has everything a publisher could dream of: 100 years of positive branding, and a sweet printing contract based on high-volume, multi-title efficiencies and paper being purchased as cheaply as by anyone in the business. It also must have had a flexible publishing perspective, one that could adjust with the economy and economics of the times. If the economy is slipping, then so glides your editorial message to your constituency. House & Garden had almost a million paying readers, just waiting for its insights and instructional visions.
I also think youth contributed to this murder. It's an old publishing tale of buyers and planners who are too young and in the earliest parts of their careers, who don't yet have the tutoring to look beyond the numbers. These youngling buyers need the experience of years and the mentoring advice of seasoned professionals to look at the magazine business in a different light than other media. We are not an iPod. We don't claim to be one. We are not a download. We are print, and we have tremendous worth. We can reach market segments that are as yet untouched by the Internet. This will not last forever, but it is true for today for many titles.
The lesson here is one of choice. Chuck Townsend and Condé Nast chose to capitulate. Without all the facts, I think it was unnecessary. They could have taken this title in any one of a dozen other directions. Even though it was a competitor to some of Condé Nast's own titles, I believe the death was a revenue blunder. They angered a million paying subscribers and left millions of dollars on the table with no place to go but elsewhere.
I'm not saying that there are no titles that deserve a quick death. Many do. But this wasn't one of them.
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.
BoSacks Speaks Out: "Fork in the Road: Which Direction for the Publishing Industry?"
As I have published here before, I am a principal partner in mediaIDEAS which investigates and provides original research reports with actionable advice and analysis for the publishing/media industry. I have asked for and received permission from mediaIDEAS to send to my readers a small portion of a recent research paper whose conclusion after a detailed analysis was that full color flexible e-paper display will be available to the market by 2011.
The report goes on to say that publishing magazines and books incorporating high quality color artwork such as those involved in the fashion/design/art sectors, and looking to develop digital editions, need to carefully monitor developments in electrowetting display technology . . . Planning for this event is critical to the future profitability, and even the existence, of such publishing companies.
The reason I asked for permission from my business partners to release this portion of our Call to Action is that I believe it is critical for our industry to fully comprehend the technologic reality on our door step. We are on the threshold of a new digital age. As publishers we can adapt and prosper or wither on the vine of antiquated protectionism and dysfunction.
On February 7, 2005 I debated Samir Husni at Primex hosted by IDEAlliance in an event titled "Fork in the Road: Which Direction for the Publishing Industry?" After the debate I was asked an excellent question from the audience. I was asked how long till publishers have to start really paying attention and worrying about e-paper. My answer was that five years from that time epaper will be real, functional and a necessary item on any publishers business plan and watch list.
As a futurist with an impressive track record of prescient predictions under my belt for the last 35 years, I am sad to report to you that I was wrong. Yes, wrong. It didn't take five years but rather three years for e-paper to be available to the general public. And the technology is growing at an exponential rate. Look around you and read the writing on your Kindle, which is currently sold out and backlogged. E-paper is here and it is not going to go away. The report from mediaIdeas and my own research is correct. Publishers must be . . . . planning for this event as it is critical to the future profitability, and even the existence, of such publishing companies.
This is not and should not be a fearful transition. Everything stays the same except the actual reading platform. The paginated (metered), well designed, and edited magazine experience is the same. The same writers, editors, artists, and mostly the same publishing staff will be required to "manufacture" magazines of the future. I would also add that it is not an either/or scenario. There will no doubt be both a printed version of magazines and an e-paper version available to the general public. The question will come down to one of cost and reader preference.
Just this morning I've completed a review of the Amazon Kindle. As an experienced e-paper reader the future is clear and the current arguments about the future of e-paper are as relevant as the old discussion of whether or not film-based printing will ever be replaced by CTP (Computer-to-Plate). I'm sure we all agree that was indeed a very juvenile argument. As much as this sounds like bravado, I was right then and I'm right now. I will go further to say that someday, perhaps less than ten years from now, the e-reading experience will be more preferred by the majority of the reading public than the inefficient, costly, environmentally unfriendly, and extremely dated current magazine methodology. Are we there yet? NO! But you can bet your bottom dollar that we will get there. And if you don't believe and prepare for it, it will be your bottom dollar.
Tuesday, February 05, 2008
Coupon Mailer Urges Postal Rate Hike for Magazines
ValPak targets 'low-volume, high-cost magazines.'
By Joanna Pettas
In an era of rising postal rates, it appears it's every mailing class for itself.
Direct marketing coupon mailer ValPak filed comments with the Postal Regulatory Commission last week encouraging the commission to raise Periodicals rates by a double-digit percentage-an increase that would be well above the CPI rate cap, according to American Business Media. If the commission finds it can't get around the CPI cap, ValPak recommends that the entire CPI-based increase be targeted on "low-volume, high-cost magazines that are circulated nationally."
ValPak's comments are in response to the finding that Periodicals failed by a wide margin to cover its class's postal costs in fiscal year 2007, according to the USPS's filing of its cost and revenue data by class of mail.
ABM is planning to file responding comments by the February 13 deadline, arguing that an excessive increase for Periodicals which make up less than 4 percent of mail volume would have a "nearly immeasurable effect on other mailers." The comments will also highlight the fact that the present Periodicals rates-on average, 11.8 percent higher than the previous ones-were in effect for only two and a half months of fiscal year 2007, that the new rate design will have cost-reduction effects and that the new Flat Sequencing System, set to be deployed this year, will lessen the cost of Periodicals for the USPS.
ABM and ValPak did not immediately return requests seeking comment. A spokesperson for the Magazine Publishers of America said it's too premature to comment.
Monday, February 04, 2008
What's Really Wrong With a Little Media Company Called EBay
Media Company? Yep. Incoming CEO Donahoe Must Figure Out How to Better Market Site's Content
By Simon Dumenco
Everybody, of course, has heard of eBay, the massive e-commerce company. But have you heard of eBay, the massive media company?
Yeah, OK, they're one and the same. Actually, I've been arguing for years that eBay is more of a media company than an e-tailer. Now that the company's at a crossroads -- longtime CEO Meg Whitman announced late last month that she'll retire in March, and her successor, John Donahoe, has let it be known that he intends to shake things up. Given eBay's recently declining fortunes -- it might be helpful to stop and reflect on what eBay really does.
For starters, eBay doesn't sell stuff. Its sellers -- an army of independents -- do. Unlike, say, Amazon, eBay doesn't warehouse inventory or spend millions on shipping and handling. That's because it's mostly in the business of handling ones and zeros: the trillions of bits of data that course through its servers. It doesn't even, really, market individual products (though eBay, of course, has engaged in massive branding campaigns and does invest in advertising placements in Google search results for some of its major product categories). Rather, it delegates even the copywriting of individual product pitches to its sellers.
There's actually another company that does something very much like what eBay does -- and, curiously, nobody hesitates to think of it as a media company. Like eBay, Craigslist is all about maintaining a giant, searchable database of listings. It brings buyers and sellers together (it also, famously, brings other parties, like the oversexed and the lonely-hearted, together, but I digress). Of course, it does so, mostly, without extracting fees, because of the admirable sociopolitical sensibilities of its founder, Craig Newmark. Oddly, Newmark regularly gets slammed for single-handedly killing the newspaper classified-ad business, even though eBay, founded in 1995, is four years older (and vastly more profitable) than Craigslist.
Why does it matter, you might be wondering, how eBay thinks of itself? Because when you don't know what business you're in, you lose focus fast. Over the years, eBay forgot that it was in the information business and let its user interface languish. It fell behind, too, on its product-search functionality (new CEO Donahoe has promised to roll out a better system soon). It abused its sellers by repeatedly jacking up fees to pump up its balance sheet. (Donahoe just announced a listing-fee cut but pissed off sellers anew with a new, steeper back-end fee structure.) And it began to think of itself as a glamorous retail destination -- thus its recent "Shop victoriously!" campaign -- when, in fact, shopping on eBay is often a hugely frustrating experience.
My advice to Mr. Donahoe? Stop masquerading as a real merchant. Real merchants have control over their inventory, individual product pitches and fulfillment in ways that eBay, by definition, never will.
Stop pretending there's something inherently glamorous or "victorious" about poking around in your virtual yard sale; that's just a recipe for frustration and disappointment, which is why eBay recently has seen declines in unique visitors.
Remember your real value proposition. Back in 2000, eBay ran TV commercials with a tagline that nailed it: "If you broke it, lost it, need it cheap or just can't find it anywhere else: eBay." (In a recessionary economy, emphasizing that "need-it-cheap" angle in particular is surely the way to go.)
And remember that you live and die by your content -- all the data points you have in your giant eBay spreadsheet at any given time -- and how you present that content and how sellers and buyers interact with that content.
Mostly, though, just remember that you are -- no kidding! -- in the media business.
Newspapers and Buggywhips
By Lawrence Henry
I grew up in a newspaper family. My grandfather ran a small town journal. My father headed up the advertising department of a chain of suburban weeklies and later published his own weekly paper in Florida. I have lived through the switchover from letterpress to offset printing, through the death of the evening daily (done in by TV news), through declining circulation, through price hikes in newsprint, and through the Internet.
I've set type, run printing presses, sold advertising, written stories, done page layouts, and edited sections. I cannot remember a time when newspapers weren't -- in some way -- going in the tank, failing, losing circulation, or losing money.
Yet we still have newspapers, and newspapers continue to be a force -- in the shaping of information and public opinion, and in the political life of the nation. They do so in spite of comically bad management, the near-total disregard of the usual high-profit demographic (the one that goes to the malls and the multiplexes), their sheer wrongheadedness in matters of public policy, and the alienation of their writers from the lives of everyday people.
IN ONE OF HIS books, humorist Dave Barry made fun of the usual way that newspapers try to turn around declining circulation. They look at their readership, they find out that younger people don't read the paper, and they decide to appeal to the readers they don't have -- or at least try. The paper's panjandrums determine to make their graphics kickier, to run more youth-oriented features, to cover entertainment, to make the product livelier and more fun.
Of course, the effort fails. The paper can't compete in the entertainment and fun market with TV, radio, and (for those of the younger set who read) specialty teen magazines. Instead, the newspaper prints less of what its dedicated readers want, and therefore loses more of its core audience. Five years later, says Barry, they do the same thing all over again.
Ironically, everybody used to read Dave Barry. If you could field a newspaper full of Dave Barrys, there would be no problem with the medium at all.
THE DECLINE AND FALL of newspapers mirrors a publishing failure in the past, that of general interest national magazines. Used to be everybody read Look, Life, Collier's, and the Saturday Evening Post. Those giants of publishing collapsed in the 1960s and 1970s, and we have not seen anything like them again.
But magazines did not disappear. In the language of marketing, the large, vertically oriented national journals gave way to dozens of horizontally marketed specialty magazines. The 1970s saw the flowering of the city magazine: New York, Texas Monthly, San Francisco, Washingtonian, and so forth.
At the same time, new magazines sprang up to address specific niche audiences. At the time, I worked for a publisher's representative (an ad sales agency) that took pride in having sold the first credit card ad to Ms.
To the surprise of most of us in the magazine biz, Ms. is still around, witness a recent flap over the magazine's refusal to carry an ad from Israel. Eleanor Smeal, Reagan-era head of NOW (and, I presume, still unable to pronounce the "d" in "administration" or "admit"), edits the book.
The fragmenting of the magazine world presaged the development of "narrowcasting" in cable television. Now, everyone can find his or her special interest reflected in at least part of a cable channel. Pool and poker could never have succeeded in national media without a proliferation of channels. And to pursue the parallel further, viewership of the big networks has fallen much the same way that newspaper readership has.
JUST LIKE NETWORK TV, newspapers will survive. So savvy an entrepreneur as Rupert Murdoch would not have bought the Wall Street Journal unless he was sure he could make it into a "big, big-titted hit" (to quote the Robert Duvall character in Network).
Murdoch, opines Ed Lasky in the American Thinker, will make his product a profitable market leader by synergizing with other elements of his media empire, and by infusing capital and talent into the newspaper.
Murdoch is a special case, aiming, as he does, to make the Journal the pre-eminent newspaper in the U.S. For publishers of more modest means and aims, the motto going forward will be synergy and specialization. Some combination of the Internet and print, some certain target audience, some canny design and organization, all will point the way forward for the newspapers of the future.
Some may look like professional journals, some may resemble the rabble-rousing shout-sheets of the Colonial era, some may take off from hobbyist enthusiasms. The big dailies like the New York Times and the Washington Post will survive. At least a few of the biggies have to, if for no other reason than to provide content and direction for broadcast newsies -- who can't do their own reading and research.