The state of publishing and digital media

The state of publishing and digital media
Written by Gary Howes
Today PriceWaterHouseCoopers (PWC) releases their report on the current state of the global publishing industry with a focus on the ongoing debate as to whether digital has spelt the death of print.

The global consumer magazine market is currently worth about £43 billion - up from about £38 billion five years ago.

Advertising accounted for most of this rise. Between 2003 and 2007, revenues from print advertising increased at a compound annual growth rate (CAGR) of 4%. Conversely,
circulation revenues grew by just 1.9%.

PWC Entertainment and Media Practice suggests that the consumer magazine market will reach about £51 billion by 2012, and that advertising will once again generate most of the increase.

It is however expected that revenues from digital advertising will grow at a very much faster rate than revenues from traditional print advertising.

Between 2004 and 2008, global expenditure on Internet advertising rose at a CAGR of 38.1%, whereas print advertising in consumer magazines and newspapers grew by just 4.4% and 2.4%, respectively.

The pace at which online advertising expands is likely to slow over the next five years. Even so, PWC believe that revenues will increase at a CAGR of 19.5% - three times more than the rate at which expenditure on any other form of advertising is projected to grow.

Consumer trends

PWC says the global publishing industry is undergoing major changes. A growing number of people are migrating from the printed page to the Internet for information and
entertainment. So what should consumer magazine publishers and media buyers do to succeed in the digital age?

The research shows that:

Most consumers still prefer to read hard copies of magazines, but many are also interested in reading digital content (by which we mean interactive materials, not
PDFs or other static formats which can be viewed online) - and younger consumers would rather access content digitally.

A significant number of consumers also express interest in using new digital devices to read digital content, once these devices are commercially available.

However, consumers expect to pay more for printed content than for content distributed electronically. Indeed, the research suggests that they are not prepared to pay more than half the sum they would pay for a printed magazine.

Moreover, many consumers see digital-only content as a substitute for printed content. So any magazine publisher which launches digital content connected to its brands risks cannibalising subscription and circulation revenues from its traditional print magazines.

However, there is no evidence thus far that consumer magazine print products have been cannibalized by the presence of digital versions of the magazine on the title's website. This fear may therefore be groundless.

A number of magazine publishers have responded to the digital revolution by reshuffling their portfolios through acquisitions, disposals and new launches, or by forming strategic alliances to get access to the skills they need.

As progress in developing digital media is being made in mainland Europe, Britain and in North America, Eastern European publishers continuing to build up their print portfolios, as this relatively new industry develops.

British and North American magazine publishers expect to generate as much as 20% of their total revenues from digital platforms within the next five years, whereas mainland European publishers expect to generate only 10% of their revenues from online activities. This reflects consumers' willingness to pay for digital content in these markets.

According to third party research, smaller publishers in Britain and in North America are far ahead of their mainland European counterparts in digital investment and development.

And it is those that have been able to leverage strong brands across multiple media platforms and generate revenues from online advertising, search-engine marketing and e-commerce that have proved most successful.

BoSacks Speaks Out: Review of the Kindle

BoSacks Speaks Out: Review of the Kindle
Publishing Executive Magazine
By BoSacks
http://www.pubexec.com/story/story.bsp?sid=92800&var=story

This is a review of the Kindle Epaper reading device. There are by necessity two parts to this review - the review of the Kindle and the review of the Epaper. If I were reviewing a new state-of-the-art MP3 player, I wouldn't have to describe to you the inherent value and functionality of music, what it is and what it does - you already know. Everybody is familiar with music and it requires no descriptors on my part. Not so with epaper and epaper devices. Both are new to the public and both require understanding and explanation.

I have read three novels, two magazines and one newspaper on the Kindle. (I thought a page-turning series of an original pulp fiction giant was the right choice for reviewing an Epaper device. I chose Edger Rice Burroughs' John Carter of Mars series. Mr. Burroughs was a product of his time and, as such, was clearly a racist and a staunch sexist. But those attributes aside, he could sure tell a fanciful and exciting story.) My reactions to the three publishing types are as follows:

The Ebook experience is excellent and enjoyable. It was book like and yet had features that no book has.
The Enewspaper experience was fair. With a newspaper the expected visuals, photos and charts were non existent and that colored my reading and my expectations.
The Emagazine was a complete flop. All that was delivered was straight text in ebook format. What distinguishes a magazine from other formats, among other attributes, is the design element. The Kindle magazine experience is completely devoid of style and design. This is either an oversight by Amazon or just plain uninformed laziness. I will assume that they received appropriate XML files from the magazine publisher, which should contain all the elements of proper magazine and page construction. Just a little more effort on someone's part and the magazine reading experience would have been better. Now is the time for publishers to start to strategize how they will reconstitute their franchise into a pleasant epaper experience.

Epaper in this device exceeded my expectations. Epaper, just like real paper, does not have under-panel, background lighting. In fact it has no light emission at all. It works on the ambient light or reflective light available in the room you are in just like real paper. The refresh rate or the time it takes to change pages is no longer and perhaps quicker then the time it takes to turn a traditional page. The type was crisp and wonderfully variable. With the ease of two flicks I had a range of font sizes at my command. The substrate background was acceptable, but could be brighter and whiter, more in line with the Sony Ereader.

The bottom line in this review of the Epaper experience is a resounding success, and it will only continue to get better.

The rest of the tale is the actual functionality of the machine called a Kindle. This, too, will improve over time and is not a bad submit for a first edition. But I do have some issues with the design and instrumentality. Unlike some other reviewers, I did not find the Kindle ugly, but neither is it of a completely compelling design like the iPod. The Kindle comes with a quaint querty keyboard that was easy to use and necessary to have for the purchase of titles while on the road. It also comes equipped with a nice pocket book sized 6-inch E-ink display, 256MB of internal memory, which they say and I believe, holds 200 books. It is also equipped with an easy to reach scroll wheel and a standard mini USB port. It has a 3.5mm headphone jack, SD slot for extended external memory, and is connected for downloads via cell towers that transmit data over a network called EV-DO data. I am being specific about the data delivery because in my case I live in a rural area of New York. Here I have spotty cell service, but no EV-DO data, so in order to get my Ebooks delivered via the data network, I had to drive 13 miles to a town with greater population and therefore greater cell service. Once in range, the 5 books I ordered downloaded in seconds.

Another great feature is the inboard dictionary. At any time you can use the scroll wheel to highlight a sentence and the dictionary provides you with information about any complex words on that line. It was both useful and functionally easy. You wouldn't believe it but John Carter of Mars has an even more extensive vocabulary than Bosacks. I kid you not.


I have two major gripes about the Kindle. In the designers' zeal to make it easy to turn pages, they made it too easy. There is little room on either side of the kindle to hold the Ereader comfortably without accidentally changing pages either forward or backward. This made for an annoying experience of continually having to flip back. The other area of needed improvement was the leather cover/carrying case. The Kindle is not secured in the case. It just rests there and slides out much too easily. Call it paranoia if you like, but I was constantly worried that this $400 plastic device was going to drop out of the case and drop on the floor with a crunch from it and a yowl from me.

With all that said. I loved the overall experience of Epaper and this new device. I would bet that the revised version will fix all the mechanical idiosyncrasies, and I will be more than happy to report on that when it becomes available. But right now the Kindle version 1 is sold out, and that bodes well for Amazon and the fledgling Ebook industry.

BoSacks Speaks Out: "Fork in the Road: Which Direction for the Publishing Industry?"

BoSacks Speaks Out: "Fork in the Road: Which Direction for the Publishing Industry?"
By BoSacks
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.