Fear and Loathing in Frankfurt

Fear and Loathing in Frankfurt
Posted by orionwell

An interesting survey sponsored by the organizers of the 2007 Frankfurt Book Fair in October provides some insights into the group mind of publishing industry professionals. As reported in the Independent Publsher reported the survey asked respondents to identify the specific challenges and threats facing the industry and to predict emerging trends and areas of growth. Over 1,300 professionals from 86 countries took part. Respondents were predominantly European (85 percent), with 9% from North America and all other continents represented roughly equally.

Concerns about digitization were strongest in English speaking countries, with 71 percent of North Americans, 77 percent of Australasians and 68 per cent of UK respondents rating this challenge as the most important.

Respondents rated the following as the biggest threat to the publishing industry today:

Competition from other media and sources of entertainment (50 percent)

Over-publishing (31 percent)
Proliferation of piracy (23 percent)
Illiteracy levels in both western Europe and the developing world (17 percent)
Who is actually steering the book industry today, making the decisions that make publishing successful and generate the bestsellers? The survey finds that 37 percent felt that publishers were still key to the success of the industry. Marketing professionals, at 31 percent, were not far behind. 22 percent see the consumer as leading the demand for books - only 8 percent felt that authors drive the industry.

Finally, the industry was asked where the major areas of growth are for the industry in the coming years.

44 percent of respondents identified the use of e-books
41 percent identified audiobooks, many of which are now available as downloads
As the world becomes increasingly globalized, 27 percent of respondents saw books in translation (much of the business of the Frankfurt Book Fair) as a growth area.
27 percent identified educational publishing
You can view the entire survey on the Frankfurter BuchMesse site.

So what should we make of all this? The bogey men identified in the survey seem to be the usual suspects. With the new year looming, I will make my own predictions:

More publishing will not undermine the market for books. To the contrary, it will expand it into new areas. Though the market will continue to fragment into ever finer niches and sub-niches, we will find ever more efficient ways to aggregate the fragments.

e-books will continue to in sales, but like audio books, will remain a small part of the overall publishing market.

The printed book, far from being eclipsed bydigital media, will become a type o digital media itself - think e-paper and conductive ink - and attain a new coolness factor.

The hand-wringing over literacy will turn out to be misguided, much as each generation's hand-wringing over evolving language usage patterns of younger generations.

Authors will become more important than publishers and the various elements of the traditional book marketing machine. Savvy authors will use the Internet both as a vehicle to build an audience while they develop their work, and as a tool to generate low cost, but highly effective market buzz and book sales.

During the next decade or two, we will see the end (or the substantial diminshing) of physical book distribution and the end of book returns. In combination with better analytics for selecting and managing titles, this will make book publishing a highly profitable business.

I believe the future for books and publishers is much brighter than many of our colleagues who filled out the survey in Frankfurt. Unlike many industries, publishing is limited only by the human imagination. As for our fears about the challenges that face us - FDR said it best; the only thing we have to fear is fear itself.

BoSacks Readers Speak Out: On Roy Reiman, Time's Maghound, Bad Math and Prints Future

BoSacks Readers Speak Out: On Roy Reiman, Time's Maghound, Bad Math and Prints Future.
www.bosacks.com

Re: The Future of Print Publishing and Paid Content
Scott Karp's thoughtful piece on the future of publishing had a fairly straightforward central premise: since readers know that online content doesn't cost the publisher anything to distribute, they won't pay as much for online content as they will for content in print. Karp said that consumers "intuitively understand that it doesn't cost the publisher nearly as much to make the content available digitally as it did to put all of those books physically on a shelf."
Are manufacturing and distribution costs what make print different from online? I'd suggest that the answer is a resounding no. I think many customers pay a premium for content in print because print has intrinsic qualities that make it more valuable.

Let's look at another guide to the relative value of print and online-the advertising revenue stream.

There's a serious difference between the CPMs of print and online advertising. An ad that runs in a magazine or newspaper commands a much higher price per exposure than an ad on the magazine or newspaper's Web site . . . even if the ad appears in the same content in each medium.

The cost difference is a pretty clear indication that print has higher value for an advertiser. It's hard to imagine that advertisers would pay a premium for print if they didn't recognize additional value, or that publishers wouldn't charge more for online advertising if they could.

We could debate the relative merits of the two media for years. In fact, we have. But why print CPMs are higher than online CPMs isn't as important as the fact that they simply are.

Karp's piece ended just when he got to the good stuff. He mentioned that the "citizen-journalists" who contribute to BostonNow prefer to be published in print rather than online-another way of saying that print offers higher value . . . which is why writers prefer to see their work in print and why marketers are willing to pay more for print advertising.

As practitioners of the publisher's craft, we owe it to ourselves to promote the advantages of print. It's certainly in our financial interest to do so, and the intrinsic merits of different media aren't insignificant. Writers recognize the difference. Advertisers pay for the difference. Of course publishers need to embrace the Web, and of course exciting opportunities await online . . . but it's worth remembering that from the customer's perspective, the value of print (like the value of any medium) is completely unrelated to a publisher's costs.
(Submitted by a Publisher)


RE: BoSacks Speaks Out: Bad Math Among eBook Enthusiasts
Tim O'Reilly is a very smart publisher. I'll add a different angle. Let's assume that he's wrong and that prices do fall to, and remain at, $5 a title. What publisher and author combination can make money that way? Reading hasn't reduced in volume because the prices are too high - books just aren't that expensive. If you have a current business model under which most titles don't even make back the pitiful advances that authors get, and where the cost of the actual paper is only about $1.50 a copy, then dropping the price by 60 to 80 percent is going to mean that publishers won't be able to afford to print anything that isn't going to be wildly successful. Current backlists may stay around (if the publishers have acquired the necessary rights), but forget the variety of titles coming out now. You'll be down to a handful of authors who can generate the necessary sales. Then
supply and demand will kick back in, because there are those massive infrastructures to feed, and prices will head back up anyway. Some individual authors might be able to self publish, but if they're getting 35 percent of $5, that's $1.75. Take out costs of design and production, and maybe they're at $1 a book if they're lucky, which is the inadequate stream of money they made from publishers - too low to support self-publishing. So $5 a copy, if really gutting the paper model, would really leave book publishing virtually dead.
(Submitted by a Writer)

RE: Can Time Inc.'s Maghound Concept Work?
This seems like an awful lot of work, with a whole bunch of folks needing to pay attention to the details, for not much convenience. If I want a magazine, I will subscribe, often for years at a time (to keep those annoying renewal notices at bay.) Who really thinks there are consumers with the time, interest, and inclination to work through a market basket of different magazines on a try-it-I-might-like-it basis? This has a funny odor to it, smelling something like the old Publisher's Clearing House stamp programs, and we all remember how that ended up. Sorry, I just don't get it. Seems very last century in the internet world!
(Submitted by a Director of Mfg and Dst)

RE: Can Time Inc.'s Maghound Concept Work?
This is overblown.. . . They've been fooling with this for years, even printed and mailed a catalog in 2004. It's just Time Inc's new age version of PDS, and is not likely to be a big hit. There's trouble in Stanford, don't you know . . .
(Submitted by a CEO of a Distributer)

RE: Roy Reiman Speaks Out; Setting the Record Straight:
Hats off to Mr. Reiman for clarifying this muddled issue. Roy Reiman is so correct regarding the significant differences between a national magazine business model and a regional magazine, particularly with regard to circulation levels. Years ago the brilliant and venerable Bill Ziff, owner of Ziff-Davis, stated a very similar thesis in a Folio article that encapsulated most, if not all, of the great truths about running a profitable magazine business, i.e., serving the reader first and foremost is the key to profitability.

What I find particularly troubling is the obvious question that RDA avoids mentioning, i.e., If Reiman Publishing didn't make money (and make money hand-over-fist) why did RDA bother to buy it? If the Reiman business model didn't work at the time of purchase, the senior management at RDA and all of its many consultants would never have pursued the purchase particularly given RDA's own profit problems at the time. I would love to see what happens to the renowned Reiman renewal rates over the next three years and the consequent cost of replacing lost renewals due to the dissatisfaction of subscribers who were sold on the premise of no advertising and are now experiencing a magazine that is just another advertising vehicle.
(Submitted by a VP Circulation Marketing)

Re: How an electronic newspaper could become profitable
Bill Richards may know the newspaper business from a reporter's perspective, but he doesn't understand the business side. Eliminating paper by going electronic does not eliminate the need for circulation. The paper still has to be promoted and fulfilled -- and audited. Emarketing is a lot cheaper than traditional marketing, but it still has to be done.
(Submitted by an Unknown)

RE: Roy Reiman Speaks Out; Setting the Record Straight:
What a refreshing new take, people in the know directly responding in an open forum.

Bob, I believe this is what you have strived for all these years, an open honest discussion among the leader's of the publishing industry.

Now that the record is set straight with RDA and Mr. Reiman, here's what I want to know:
How much more downsizing, outsourcing and consolidation will happen in '08?

How are today's publishers going to make a profit in '08 and beyond?

What is being done to counteract the rising costs of paper, postage and manufacturing costs?

What efforts are underway to increase advertising spend in print? In digital?

Is a no-advertising model like Mr. Reiman suggests in the works?
Who today has a national title that could support itself without advertising revenue given the rising costs of paper and postage?

There seems to be a big surge in outsourcing of non-core business functions (latest is production management and print buying). What are the printers doing to bring value added to the publishers without giving away the profit margins? What are the publishers doing to help their printers and paper suppliers stay in business?
(Submitted by a Director of MFG)

Re: BoSacks Speaks Out: Mea Culpa on RDA, Reiman and Ripplewood.
Bob: I thought I had seen the article before too, but figured maybe it was a slow news week. It is good to read the viewpoints of each of you in the same posting, as now. As an observer, and a subscriber to these magazines, I don't believe my core thoughts on Ripplewood's approach has changed much, but today's post certainly adds perspective.

That you are at the 'epicenter' of a huge volume of communications regarding this business and yet retain your sanity, perspective, and optimism, is a major accomplishment, beyond the ken of most.
(Submitted by a Publisher)

BoSacks Speaks Out: Print Will Remain Vital

BoSacks Speaks Out: Print Will Remain Vital

I've had four or five print salesman write to me yesterday and complain about my recent rant of a digital vs. a print geocentric future. Here is the full dope on he subject.

I have never said that print is dying or even withering on the vine. Nope, I never said it. I think print will have a fine half-life as we proceed into the new world order. Print will happily be around for several generations. And for the printers reading this, they can/will or might have a very successful career. I can say this as I am a print manufacturing specialist of 37 years, I understand the print process better than most, and I am a believer in the mystique of ink on paper.

But that affection does not blind me to the near and future prospects of new information distribution. My friends, it is possible for you to believe in the happy prospects of a viable print career and at the same time understand that digital is going to supplant print as the number one source of reading.

It is going to happen, in fact, it is already happening. So what? There are plenty of millionaires in the radio business 50 years after the advent of television. There is room in this world for parallel systems of communication. Print, TV, Radio, and the digital World Wide Web can coexist without all the damn rancor. Don't be so paranoid and defensive; it serves no logical purpose except to deny the societal trends before your eyes. Pick your career and ride it for all it's worth, but don't complain to me for covering the facts and possible future of our industry.

The Internet is here to stay and so is the digital process. It is not going to get weaker, but rather stronger and much more impressive and robust. It will imbed itself into everyone's life in ways we can't even imagine.

And, oh yes, every one of the complaints of my coverage that I received today came to me over a blackberry digital device. I say that is case closed.

"The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails."
William Arthur Ward (American dedicated scholar, author, editor, pastor and teacher)
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Print Circ. May Decline, But Will Remain Vital
http://www.editorsweblog.org/analysis//2007/12/tim_bowdler_johnston_press_ceo_print_cir.php#more
Tim Bowdler, Johnston Press CEO: print circ. may decline, but will remain vital

Tim Bowdler, one of UK's most respected press chief executives, CEO of Johnston Press, agreed to release an exclusive statement for the Weblog about his outlook on the future of the industry. In the following, he both acknowledges the realities of decreasing sales and debunks excessively gloomy forecasts.

"You could be forgiven for being very gloomy about the prospects for the newspaper industry at the present time. Indeed, if you listened to the financial community you would receive a very grim analysis with cyclical declines driven by weakness in the economy exacerbated by the structural challenges which our industry faces. They would emphasise declining circulations and the failure of several recent attempts to sell regional newspaper titles. Share prices have been badly affected; Johnston is at half the level it was at the beginning of the year. One analyst, who chose to remain anonymous, described the industry as being in its "death spiral".

I am in no doubt that the gloom expressed by the financial community and others is greatly overdone, much of it based on a poor understanding of our industry.Underlying cyclical trends are obviously something we have to contend with and in some areas of our business we have recently seen weakness in advertising revenues as a result. Whilst there are also structural challenges, migration to websites has not had a significant impact. This has been much more as a result of events like motor dealer consolidation and the sea change in public sector spending levels which has resulted in a dramatic reduction of job recruitment in that area of the economy.

Whilst circulations are in decline, this has been largely confined to daily newspapers and most obviously those serving the larger metropolitan areas. Weekly paid-for newspapers which make up a significant part of the UK regional press have suffered relatively little over the past decade and publishers are not sitting inactive watching sales drift away, but are instead launching new titles, targeting geographic and demographic niches and in that way continuing to ensure high levels of market penetration and advertising response. Taking a longer term view, I suspect we will sell fewer newspapers, but, when coupled with these new print launches, we will continue to achieve high levels of market reach which will be further extended by our rapidly growing digital channels. The regional press in the UK has also been investing in modern printing plant and new IT systems which will help to drive ever-increasing levels of operating efficiency, improved quality and enhanced customer service. And, of course, the industry is investing heavily in digital channels which have become an embedded part of the local publishing mix and an extension to our print based activities.

I have no doubt that the regional press will play an important role in the media industry for many, many years to come and that print will remain a vital part of the local media mix. As I have said, the print mix will continue to adapt, reflecting changes in market conditions and our new digital channels will expand our penetration into local communities whereby we will reach greater numbers of people than the being newspaper publishers to community media companies which will continue to exploit the huge investment we have in resources on the ground in journalism and our sales people."

Tim Bowdler recently announced he would retire from Johnston Press in 2009, once a suitable successor has been found. In 13 years, he took the company from being a "publisher of small local newspapers with a market capitalisation of £65m to a £700m group with 318 titles," reported the Daily Telegraph.

Identifying the Top Trends for 2008

Identifying the Top Trends for 2008
By Tony Silber

Unless you're a fortune teller, it's harder than it appears to name the four or five things likely to most affect your business in the coming 12 months. Here, five execs try.

The Internet is, by far, having the most profound effect on the magazine industry and judging from a quick poll with the five executives that follow, its impact is felt in every facet of the business. In this informal poll, we asked an assortment of publishers what they feel are the top trends affecting their businesses in the coming year and many are still pondering how to best take advantage of digital opportunities and how they impact brand, content value and skill sets. There are other major trends to contend with, of course-distribution and audience measurement, for example-but the Internet is still proving to be the "elephant in the room."

Rex Hammock
President
Hammock Publishing

1. Lack of confidence or conviction by those at the top. This is such a cliché, but there seem to be train-wrecks whenever those who try to manage media companies with Excel spreadsheets take over. They want to stop calling magazines "magazines," and call them "branding platforms" or something. They start having to make decisions that are all or nothing-as in, "this idea has to generate $25 million a year or we can't touch it." Some of the folks leading giant media companies appear to me-an outside observer-to be like that line from a John Mellancamp song: a person who won't stand for something will fall for anything. That's why I'm a fan of Condé Nast over, say, Time Inc. At Condé Nast, they seem to know what business they're in. Look on their Web site and it says, "We're in the magazine business," even though they're in all sorts of media businesses beyond magazines. At Time Inc., the largest magazine business in the world, they are running away from calling themselves a magazine business.

2. How advertising decisions are made. For consumer magazines-the mass media type-these days must be especially frightening. Advertising folks are perhaps more confused than people in the publishing business. They have "budgets" and they want to place "buys" but they don't really know what they want. And, frankly, their historic business models and practices make the need to manage by Excel spreadsheets too much a part of their DNA. I feel for them as they need to spend lots of money and they don't have time to really understand the nuances of different opportunities. But I don't feel the client's best interest is always served by the current RFP process.

3. The Internet. It's the elephant in the room. I think it provides the greatest opportunity for publishing companies to totally redefine and transform what they do. However, it also provides the best opportunity to totally blow it and crash and burn. So much about the Internet-how it is used for business decision-making, for instance-has changed the role of publishers, but so many of the opportunities involve "cannibalizing" cash cows. It's like tight-rope walking with no safety net, which I'm sure is exhilarating, but I'll let others test that theory.

Paul Rolnick
Consumer Marketing Director
Outside

1. True Synergy. We need to figure out how to integrate our digital content (in potentially many forms) and print content so it's synergistic, not just moving readers from one medium to another.

2. Devaluation of content. Digital media is rapidly becoming entirely free, 100 percent ad-supported. This undermines our ability to charge fairly for printed content. A positive spin on that is it furthers the trend towards audience-based measurement of media. However, it also furthers the idea that professional, high quality content should be free. That's not in our long-term interest.
3. Newsstand profitability for all links in the supply chain. Factors mentioned so far mitigate against this since they all act to depress consumer demand for content, particularly at full price. But the weeklies' recent success (probably peaking) shows that newsstand vitality and momentum are still incredibly important to the industry. It shows that in spite of all the contra indicators people still love print media.

Nick Matarazzo
EVP Group Publishing Director
Hachette Filipacchi Media

1. We're still targeted. This is the original opt-in media. This medium is a reader choice, while other media are often consumed as background noise where the advertising is interruptive. Magazines are targeted, which leads to engagement, which leads to accountability.

2. We're in the brand business. We have a great opportunity if we don't view ourselves as being in the magazine business. We're really in the brand business, although the brand may be anchored in print. The question is how we leverage the brand content across as many mediums as the consumer wants.

3. It's about community. Magazines have always been about communities of people with similar or shared passions and interests. And interactivity has always been a part of a magazine's relationship with its readers. These traits are key to operating in the digital world and they are not new to us. Magazines have always lived in a world of consumer choice and control whether to purchase or not, or turn the page or not.


Ray Chelstowski
Publisher
Rolling Stone

1. Engagement and accountability. More than ever our advertising partners are looking to justify their media investment. In turn, any device that can demonstrate that readers have interacted with their messaging is considered a "cost of entry."

2. A sound circulation strategy. Advertisers want to know in advance that the schedule they are about to place with a title will be met with circulation guarantees that extend beyond an agreed to ratebase. What they want to better understand is the strategy behind our circulation goals and guarantees. Quality is just as important as quantity and we as an industry will continue to be challenged to deliver excellence in every practice.

3. Talent retention. Our ability to recruit talent, develop skill sets, and retain the people we groom will be central to our ability to succeed in this changing media landscape.


Peter Goldstone
President, Business Media Group
Hanley Wood

1. Go deep. Yesterday, it was wide diversification and big holding companies. Today, it's deep market focus and ownership-building out from a strong core position and not losing sight of that core.

2. True content integration. Creating a true integration of content, sales and audience strategy serving that core market across all media available.
3. First to market. Speed to market matters. Innovation is happening at an accelerated pace. You must be first in and then iterate. Learn on the fly, but jump into the opportunity quickly, and be very nimble.

4. Maintain quality. Quality matters more than ever. Cut through the noise with top-quality expertise and delivery of that expertise through multiple media and data information products.

Traditional Media: Go Digital, Increase Ad Revs

Traditional Media: Go Digital, Increase Ad Revs
by Diane Mermigas

Making the case for traditional media advertising is no longer easy, given the fervor about game-changing interactive platforms teaming with targeted user information. In less than a decade, they will be the status quo.

The proliferation of new media-from mobile phone, satellite radio and DVR subscriptions to digital cable, satellite and telco TV-has shaken the foundation of conventional ad-supported platforms. So far, they have not collectively grabbed sufficient revenues and major advertiser support to make broadcasting and print venues overly nervous. In fact, the intangible promise of emerging advertising options overshadows the tangible sobering facts.

The total U.S. population spends more hours per year watching television (a collective 466.5 billion) than all other media combined (including consumer Internet, search, radio, consumer magazines and newspapers). Conventional TV popularity is 90 times that of online video-which is growing at a compounded annual rate of 39% over the next five years, according to Magna Global. Of course, Internet search advertising is growing double-digit, but it's barely 10% of all annual ad-supported media spending in the country.

While that is little reason for television, radio and newspapers to celebrate, it suggests there is adequate time for their constructive, even lucrative digital transformation, according to Magna Global senior vice president, director industry analyst Bruce Wieser.

Wieser convincingly came to traditional media's plight last week-ironically during a presentation on emerging media advertising at the annual UBS Media Conference. His message and supporting facts were simple and worth repeating: Although alternative new ad options are taking their share of the spotlight, traditional media still has a lot going in its favor. The continuing shift in ad dollars will be made by Madison Avenue in response to tech-empowered consumers. The most powerful prevailing truth is that advertising will follow consumers wherever they go.

Even at this nascent stage of interactive market development, print and radio generally remain more portable, while TV and radio are generally more accessible and free, and traditional media typically encompasses far more content and higher-resolution video than the Internet and other rival interactive media outlets, Wieser observed.

The prospects for online media substitution of general print, radio and television are limited by various drawbacks related to traditional media, both technical and psychological in nature.

Large advertisers must shift their focus from reach and frequency to consumer behavior. All media infrastructure must be improved, and all organizations must be redesigned to accommodate the new dynamics of interactive marketing. Above all, a standardized infrastructure and a new system of standards must be fashioned to address several key concerns, including the use of uniform metrics, a smooth buying process, the use of robust user data, and the ability to match a critical mass of unduplicated and unique reach, Wieser said.

"Six-week flights can't be changed to 90-day commitments," Wieser said, referring to the contrasting basis on which television and Internet ad time generally is sold. "If (advertisers) are moving money from one place to another (they) have to justify it with comparable metrics." The bottom line: traditional media must stop working relatively well enough before advertisers will venture en masse to new ground.

So far, smaller businesses and advertisers (representing a $48 billion market) have been the biggest beneficiaries and drivers of emerging media, in which search has allowed them to connect with and explore new markets. In turn, search has been driven by the growth of e-commerce and consumers being more comfortable with securely shopping online. Large advertiser use of online and interactive platform targeting and measurability of users has been thus far disappointed, Wieser said.

There has been a general lack of integration between brand activity and sales data. In addition, few advertisers control the consumer retail experience; their sales, product and brand functions are not coordinated enough. Few of the larger advertisers are undertaking the rigorous testing required to assess the impact of new and old media. The measurability afforded by emerging media "is great, but few (advertisers) do anything with the data," he noted. The use of emerging media generally is reserved for niche-focused brands or niche-focused marketing objectives; reaching consumers across multiple touchpoints and experimenting as advertisers construct new business models.

UBS media strategist Matthieu Coppet said that advertisers' increased use of non-media marketing (such as interactive direct response) also is diverting resources from measured ad spending, although the rapidly increasing supply of ad impressions will further fragment the integrated media market. This non-advertising marketing spending is growing materially faster than advertising expenditures globally-a trend that will continue for the foreseeable future. At some point, the premium pricing commanded by targeted and accountability-based interactive media could lead to a "de-rating of non-targeted advertising value." In other words, disruption in CPM/CPA pricing, valuation and inventory is inevitable.

The need to drill down into the changing dynamics of audience reach, frequency and behavior is critical in order to recognize the phases of shifting value between old and new media platforms. For instance, TV networks' 18-49 demographic, while stagnant, can still maintain a reach of more than 90%. However, the targeted demographics rendered by interactive platforms can be more valuable per user, as in the case of the professional adults ages 18 to 35.

Although television consumption has increased among virtually every demographic-and constitutes more of a reach than any other media- online and interactive platforms have vastly significant implications for all advertising and media consumption over the next decade, Wieser said.

When emerging media revenues and support on Madison Avenue finally reach maturity, it may not come at the expense of traditional media. More ad and marketing dollars simply may be more fragmented, or spent in more places on the media spectrum. The trick will be to prevent digital interactivity from working against television, radio and print-as it has for the music industry. Already, these emerging markets and the Internet are driving global advertising and will represent 70% of overall estimated 2008 incremental growth, the analysts said. It is a good start to creating more value, rather than displacing or destroying it.

The Cover Price Conundrum

The Cover Price Conundrum
By Jason Fell

Increased production costs and pressures from distributors have publishers weighing the option of raising their cover prices. But, will a price spike bolster their bottom line or make their readers revolt?

Publishers have no shortage of pressures to raise their cover prices. Wholesalers and distributors argue that lower cover prices don't generate enough revenue to cover handling costs. Spikes in paper prices and increased postal delivery rates don't help either. Publishers of all sizes and demographics this year have considered raising their cover prices and some have taken the plunge-many with positive results.

As reported by John Harrington, publisher of The New Single Copy newsletter, more than 100 magazines raised their cover prices in the first half of this year-up about 30 percent over the same period in 2006. Of those, a third managed to increase their newsstand sales per-issue and more than 60 percent experienced better-than-inflation growth in retail dollar sales. "The market has been relatively friendly to a reasonable level of cover price increase," Harrington tells FOLIO:. "More than 30 percent see their units increase, and others see the dollars increase more than their units decline. They are generating more revenue and are making themselves more valuable to wholesalers an retailers."

What's a Dollar, Anyway?

One example Harrington highlights is OK! which upped its cover price from $1.99 to $2.99. The global celebrity gossip magazine saw its newsstand sales skyrocket 25.3 percent to 419,000 units per issue. That jump, Harrington says, may have been one reason why competing celebrity magazine giant Bauer Publishing-the company that pioneered low newsstand cover pricing-announced in August plans to modify its cover pricing strategy.

Another prime example of a successful cover price hike this year, Harrington says, is The Economist, which increased to $5.99 at the beginning of the year from $4.99. It was the first newsweekly to take its cover price over the $5 mark. Newsstand sales were up more than 10 percent during the first half of the year.

"It gets back to the editorial mission of the magazine, and we position ourselves as a premium product," explains Paul Rossi, publisher of The Economist North America. "If you have a very strong connection with the reader then you can charge more. For magazines with strong readerships, there's not much difference in a reader's mind between spending [a dollar more per issue]. It's not about gouging the customer. It's about understanding the value that people put on your product and pricing accordingly. Those people who love you will pay." At $129 per year, The Economist also has one of the highest subscription rates in its segment, Rossi says.

But, The Economist's spike in sales isn't attributable only to its increased cover price, but has been related in part to a ramped up marketing campaign, says Rossi.

Enthusiast publisher Active Interest Media increased cover prices on two of its titles. It set the price on Backpacker at $4.50 (Rodale used two prices: $4.50 in the specialty market and $3.99 elsewhere). It also raised the cover price on Timber Home Living from $4.99 to $5.99.

"There was revenue upside and not much risk for lowered sales," says Patricia Fox, Active Interest Media's senior vice president for operations and general manager of its Healthy Living Group. "Our magazines are priced at least at $4.99 and are very competitive in their markets."

Fox, like Rossi, believes that publishers will see positive results from raising cover prices if their editorial content is strong. "We don't particularly want to be the newsstand price leader, but will raise our prices when it makes competitive and financial sense." Next year, Active Interest Media plans also to raise cover prices on BlackBelt, from $4.99 to $5.99.

The New Single Copy's Harrington says he doesn't expect a surge in publishers raising cover prices next year. "Generally, the results this year have been good," he says. "If you look at most of the magazines that declined in units after increasing their cover prices you'll see that they were already in a trend of losing units. What I think will be interesting to watch are publishers like Bauer, which used to heavily advertise their low cover prices, and how they make out over the next few months."

BoSacks Speaks Out: Steering the "New World Digital Order

Steering the "New World Digital Order"By BoSacks
http://www.pubexec.com/story/story.bsp?sid=83154&var=story

There is a book by Ray Kurzweil called "The Singularity Is Near." In this book, Mr. Kurzweil has a theory about The Law of Accelerating Returns, which states that in today's business environment, "Change happens faster than we are able to forecast or predict it." This is a departure not only from long ago, but from our more recent past as well. There was, in our lifetime, the possibility of accurately predicting technologic growth. Those days have gone up in digital smoke. Technologic growth that once took multiple generations to achieve now happens in months.

Another of Mr. Kurzweil's concepts is that the rate of technologic change is not linear, but exponential. This is not a new concept to anyone in the publishing field.

Everyone knows that I love technology and the possibilities that it holds, especially for those in our industry. We are, no doubt, on the bleeding edge compared to most other professionals. Retailers, lawyers, cabbies, mothers and most others, although impacted every day by the new world digital order, are affected somewhat less visibly than those of us who transmit information in the forms of magazines, newspapers, newsletters and the like. We are pushing and prodding the system to go ever faster.

Over the past decade, publishers have digitally married the electronic workflow. It occurred to me this morning that a magazine can no longer be produced without a computer. This is not a shocking discovery, but it did make me stop and think. From the written word pecked out on a keyboard, e-mailed and clipped by the editor, formatted and manipulated by the art director, spun with great skill and digital alchemy by the production elite, and converted by the printer magically to CTP, there is no longer any step in the process that is not fully and completely computerized. The presses are controlled by digits, the bindery is efficiently automated, and the bundling and shipping is all tagged and directed by database files. In the near future, magazines will likely have little computer chips called RFID imbedded into them for further electronic enhancement and accountability.

But what exactly have we produced with all this speed and technology? We have precision-engineered a book, a magazine or a newspaper--all three printed on paper. We have created a product that requires no electricity to operate. You don't need to plug it in or even attach a cord. In fact, if you do have a cord, it won't fit. It is not sensitive to magnetic surges or system failures of any kind. If left alone, it retains its imagery indefinitely. It can be dropped, stepped upon and will still be totally functional. And if, God forbid, you should spill coffee on it, for a few bucks you can get an exact duplicate. Basically, the format can never become outdated.

So now that that is out of my system, I can move on. Mr. Kurzweil is right about the dramatic speed of change, and that change has affected society as well as technology. And although the printed product is near perfection, there is one thing that it just cannot do, and that is refresh, change and update itself. Once, these were unnecessary, unsought-after functions. Now, we may have a society that demands them.

Here is another interesting thought on technology and our new society that comes from the findings of an in-depth, seven-month study by MTV and the Associated Press on happiness and young people: How happy are they, what makes them happy, and what are they doing to ensure future happiness? The results are that cell phones, the Internet and other technologies are woven into the lives of today's young people, and nearly two-thirds say that technology makes them happier.

What we have now in "screenagers" is a generation that has the ability to be in touch with each other immediately starting at earlier and earlier ages. This new generation of kids is naturally adept with technology and the speed of its change. They are comfortable with having virtual access to friends, family and the world at large. This is a generation that is just as comfortable with digital delivery as it is with bound books.

My conclusion from all this is that there is a very positive and robust future for publishers. We have the technology to print perfect books and magazines for those who desire them. We also have the ability to reach out to new generations of readers in new formats such as e-paper, cell phones and PDAs, and who knows what is right around the corner. All that matters is that we monetize our franchise and deliver our product to readers everywhere and anywhere they would like it.

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 often called a new age corporate janitor.

Dennis Publishing Releases Facebook 'Bookazine'

Dennis taps into Facebook craze
By Stephen Brook
Facebookers of the world who while away their waking hours on the social networking website poking friends and playing Scrabulous can now read all about it - in a Facebook magazine.

Dennis Publishing is getting in on the Facebook craze by launching a "bookazine" - a magazine/book hybrid - about the networking website.

Facebook magazine: includes a section on how to create a real-life Facebook event The bookazine, which hit shops this week in time for the Christmas market, is part of the magazine company's growth strategy.

The 148-page publication, produced without the cooperation of the social networking website, includes articles "Famous on Facebook" and "Create a real life Facebook event".

Bruce Sandell, the managing director of Dennis' lifestyle division, said: "The Facebook Bookazine started quite simply.

"Like many media companies we have a huge amount of Facebook fans at Dennis - we thought we could channel that enthusiasm with our expert knowledge of 'how to' bookazines to make a really compelling product that taps into a massive consumer interest at exactly the right time.

"The bookazine will be bought by Facebook experts and novices alike, as it covers everything from a step by step guide to getting started through to smart security tips."

Dennis has developed 15 Dennis bookazines on topics including iPhone, the iPod, high-definition television and men's fitness.

Other magazine companies such as the National Magazine Company also regularly produce bookazines.

Dennis has printed 20,000 copies of the Facebook bookazine, fewer than a normal magazine, but the bookazine costs £5.99 and has a longer shelf life than magazines, staying on shelves for up to six months.

Dennis will monitor sales before deciding if it will produce a sequel.
the company has just established a product development unit to create new websites and magazines, headed by Sandell.

The Dennis chief executive, James Tye, said: "The Facebook bookazine highlights the spirit of innovation that we encourage as a company and shows how quickly a great idea can be developed and launched.
"Our new product development team at Dennis was launched to work on exactly this basis and bring products to life swiftly."

Tell me the Future

Tell me the Future
The Guardian

When we asked Vint Cerf, chief evangelist at Google, to guest edit MediaGuardian, we expected him to bring us some luminaries of the web who we don't often get to hear from. His choices transform an often-asked question ("what's the future?"), into an insight into the thinking of innovators and pioneers. It's no coincidence that three of them are founders of some of the biggest web names.

Their specialist fields (from search, to advertising, video streaming to social networking) represent what Cerf believes to be the most exciting areas of development on the web and in the world; notably Steven Huter and Adiel Akplogan, who have pioneered the internet infrastructure in Africa.

Finally, each one has had, and will continue to have, a profound impact on the future of media.



Social networking
Chris De Wolfe
CEO, co-founder MySpace
In only a few years, social networks have become a staple in the internet landscape as the social networking phenomenon allowed people to "put their lives online". A person's profile became a representation of who they really were in the offline world, and allowed them to transfer their offline world online.

More than ever, social networks are blurring online and offline worlds, evolving into social destinations that are driving the direction of the larger web and affecting industries like advertising, music and politics.

Predicting the future of social networks exclusively misses the larger point - these evolving online social destinations are laying the groundwork for the new social web which we believe is becoming infinitely more personal, more portable, and more collaborative.

First, as we expand these social destinations to all corners of the world, we must always think in terms of the individual. With millions of people using social websites, there's an increasing demand to make everyone's web experience personal. In the same way a home or office is your physical address, we expect your personal, online social profile to become your internet address. When I give out www.myspace.com/chrisdewolfe to friends and colleagues, everyone knows where to find me online.

We expect aspects of all socially-based sites to become increasingly portable. In terms of mobile, we expect to have relationships with every carrier and device-maker in the world and we expect that half of our future traffic will come from non-PC users.
Social activity is happening everywhere and we expect applications and features to be more fluid, based on the online population that want content where they want it, when they want it, and how they want it. Social activity should be portable and we expect the industry will continue to move in that direction.

Lastly, online social destinations work best when creativity and development are collaborative concepts. From personal profiles, to the widget economy, to the OpenSocial standard - the future of the social web will harness the savvy of the masses to produce more relevant and meaningful social experiences, ultimately pushing the larger industry to be more innovative and progressive.

Lowering the barrier to entry for a new generation of developers will lead to a more collaborative and dynamic web and directly affect the tools and feature sets available on socially-based sites. Supporting a more collaborative web creates a more global and participatory internet experience for everyone.

The evolution of social networks is kick-starting a broad global shift for how people, content and culture collide on the web. Right now we're looking at the tip of the iceberg for what the social web will look like in the future. Fundamentally, all social destinations must expand while staying personal, they must engage users while empowering portability, and they must work with up and coming innovators and major web leaders to both collaborate and contribute to the larger web community.

Advertising
Maurice Lévy
Chairman and CEO, Publicis Groupe

Five years is an eternity in technology, but from our vantage point a few things are clear about what the internet and internet advertising will look like in 2012. One, virtually all media will be digital, and digital will enable almost all kinds of advertising. Two, online advertising will depend more than ever on the one element which has always been at the heart of impactful advertising, both analogue and digital: creativity. The explosion of media channels means this is a glorious time to think and act creatively. In art history terms, we are at the dawn of the Renaissance after the Dark Ages.

Just as the Renaissance broke down the distinctions between sacred and profane art forms and between individual and community, so we are seeing a similar exciting blurring today - and this will only intensify. Linear media is fast giving way to liquid media, where you can move seamlessly in and out of different settings. Prescribed time - the 7 o'clock news, the Friday night out at the cinema, etc - is now becoming multitasking time. People are no longer willing to put up with interruptions for a commercial break during their entertainment experience, and so we have to find incredibly creative solutions to interact with them and engage them in genuine and honest ways. This implies a brave new world of engagement and involvement between marketers and consumers and will also mean co-production between marketers and media owners. Scale will be critical: in five years' time, around 2 billion people will be constant internet users and mobile internet computing will be ubiquitous. What a great time to be in the business!

Mobile
Biz Stone
Co-founder, Twitter
As we increasingly realise the web as a vital social utility and important marketplace we cannot ignore an even bigger potential. The power of the internet is not limited to the PC. Twitter has emerged to create a seamless layer of social connectivity across SMS, IM, and the web. Operating on the simple concept of status, Twitter asks one question: "What are you doing?" Friends, family and colleagues stay connected through short responses.

The potential for this simple form of hybrid communication technology is strong. For example, a person in India may text "Follow Biz" and get online via Twitter over SMS in a matter of seconds. Biz might be updating from the US on a PC. Nevertheless, the updates are exchanged instantly.

Our future holds in store the promise of increased connectivity to a powerful social internet which truly extends to every little spot on our Planet Earth. We're all affected by and defined by each other's actions. What are you doing?

Search
Peter Norvig
Director of research, Google
Yale librarian Rutherford Rogers said "We're drowning in information and starving for knowledge." The internet is an ocean of information and in the near future we'll speed through it effortlessly and intuitively, like a tuna. No, I don't mean you'll have fins.

If you haven't been searching for [tuna tail vortices] recently, you may not know that a tuna's body creates small vortices in the water that are then channelled by the tuna's tail to create additional power.

This symbiosis of tuna and watery environment forms a more efficient propulsion system than anything designed by human engineers.

In the future, a similar symbiosis of searcher and computational environment will allow us to move faster through the internet than we would have thought possible. We will not just be typing in keywords and getting back a list of 10 web pages.

Instead, our interaction will be more fluid, our computers will accept our requests in many forms, and will scan our environment proactively, looking for ways to provide us with additional power. We will get back web pages, yes, along with existing books and videos, but also custom tables, charts, animations, databases, and summarisations created on-the-fly in response to our specific needs.

Today, nobody says "I need to connect to a megawatt power station" - instead we assume that electricity will be available on demand in almost every room of every building we visit. Edison could see that this would be useful, but could not foresee the range of appliances, from food processors to mp3 players, that this availability would enable. So too will information flow freely to us in the future, and be transformed by as-yet-unforeseen information appliances.

Archive
Bruce Cole
Chairman, National Endowment for the Humanities (US)
At the National Endowment for the Humanities, we believe the internet and other information-age tools, such as digital archiving, will help us understand the world more deeply, broadly, and creatively. For humanists just as much for scientists, the ability to mine, analyse, and understand data, simulate complex environments, and combine information from a wide variety of sources, is critical to 21st-century discovery and innovation.
The exciting new tools of the digital age also present unique challenges. With digital technologies, we can comb through information in seconds versus years, and assimilate knowledge from a much broader array of sources for new insights. But the wellbeing of the infrastructure itself demands new time-frames. Information in books can be preserved for centuries before transfer to new "media" is needed. Information on disks, thumb drives, and other digital media has a lifespan measured in years or even months rather than centuries before transfer to the next generation of media is required.

Just as physical infrastructure is a foundation for modern life, digital infrastructure (data storage, computers, networks, etc.) is foundational infrastructure for the information age. Attention to the health and support of this infrastructure is critical to ensuring that born-digital knowledge is preserved and passed on for the benefit of future generations.

Roy Reiman Speaks Out; Setting the Record Straight:

Bringing Down the House of Reiman: Roy Reiman's on the record response
Posted by Samir Husni
http://mrmagazine.wordpress.com/

I have never written a blog that generated more responses and counter responses than the one I wrote on Bringing Down the House of Reiman one "Ripple" at a Time take one and take two. My friend Bob Sacks picked up the blog on his electronic newsletter Bosacks.com and even more people responded to the blog including Ellen Morgenstern, director of public relations at Reader's Digest Association. Well, the man himself who founded Reiman publications has decided to respond to all the responses regarding my piece on Reiman publications. What follows is Roy's response (on the record for the first time) to Ms. Morgenstern and others. Following his response is Bob Sacks' entry regarding the matter and Ellen Morgenstern's letter to Bob regarding the same issue. I look forward to other "on the record" comments about this important issue regarding magazine publishing, ownership and the possibility to publish magazines in this day and age with or without advertising.


Roy Reiman on setting the record straight:

"The writing has been on the wall for some time that a 'no advertising' model no longer works in this day and age. Even Roy Reiman's new magazine venture, 'Our Iowa', accepts advertising." -Ellen Morgenstern, Reader's Digest
There she goes again-contending that a "no ad" magazine couldn't make it today . . . and contending that even I no longer believe so, because we're accepting advertising in Our Iowa. I've watched from the sidelines and tried to stay out of this fray, because I recognize that when someone buys a company, the buyer has the right to be wrong. But after seeing the quote above-for the second time at that-I can no longer resist sharing my opinion. I've concluded that if I don't respond, it will not only add credence to her comment, but may appear I have no opinion or don't care what's happening to my old company, when the truth is I care a great deal. I don't appreciate her implying that I no longer believe in the no-ad concept without first checking with me.

The fact is I believe as strongly today as ever that it can be achieved with a national magazine that is truly different, sparkles with creativity and delivers what readers can't easily find elsewhere. The lack of advertising was the most noticeable difference our 16 million subscribers mentioned and appreciated, and now-with the acceptance of advertising-that uniqueness is gone. The problem with Ellen's conclusion is she's comparing apples to tomatoes. Here's why: With today's printing, paper and postage costs, you need about 1 million paid subscribers to make a go of it with a no-ad magazine. Well, when you have a NATIONAL magazine directed at the U.S. population of nearly 300 million people, garnering 1 million subscribers is a reachable goal. I feel that's still currently attainable with the right kind of magazine.

As I've often said, if you can't lure 1 million subscribers from a 300-million audience, maybe your new magazine isn't really that good after all. But when you have a REGIONAL magazine, such as Our Iowa, directed at a much smaller audience (Iowa's population is 2.8 million), any logical person would understand that attracting 1 million subscribers is out of reach. In that kind of limited market, you need the ancillary support of advertising. The comparison and facts are that simple. I've never been "against advertising". My first success was with a magazine supported solely by ads, with no paid subscribers. But I also learned-with the right concept-you can make it without ads as well. We successfully launched 14 national magazines without advertising, eventually topping 16 million paid subscribers. But not one of those magazines would have made it without advertising if it had been limited to a single state or regional audience. This being the case, it bugs me big time that Ellen keeps implying I've "caved in" and that I no longer believe a NATIONAL magazine can make it without advertising . . . and bases her conclusion on what she now sees I'm doing with a REGIONAL magazine. For her to keep using me as a defense of RDA's move to accepting advertising by asserting "even Roy Reiman knows that times have changed", as she was quoted recently, is very disturbing, especially in view of her added comment: "It is normal to have disgruntled former employees acting as 'sources', but there's always another side of the story." I find that comment particularly interesting, when it appears she is now acting as the "source" of my thinking, without first checking my side of the story. Most bothersome of all, though, is her assertion that a "no advertising model no longer works in this day and age". That comment minimizes and discredits the efforts of the incredibly creative crew at our company that successfully launched 14 national no-ad magazines over the years . . . and likely, if we surrounded up the best of them, would love the challenge of making it happen again today.
-Roy Reiman, Founder Reiman Publications


Ellen Morgenstern's letter to Bob Sacks regarding my blog:

Dear Bob, I respect that you are servicing the publishing industry with your independent voice and insider's perspective. You keep your fingers on the pulse of what's current for publishers. Therefore, I am perplexed why you would choose to recycle Samir Husni's column from August, where unidentified sources complain about changes taking place at the former Reiman publications under the Reader's Digest Association.

You know this is old news, and you already posted readers' responses.After changes, it is normal to have disgruntled former employees acting as "sources," but there's always another side to the story. Here are a few points to consider: The writing has been on the wall for some time that a "no advertising" model no longer works in this day and age. Even Roy Reiman's new magazine venture, "Our Iowa," accepts advertising.The ads appear to be a non-issue for our readers. We received but a handful of letters expressing concern. (One loyal reader even sent a $5 cash donation in sympathy with the rising costs of printing and publishing!)

The sale of Reiman to RDA made sense for both parties because of the natural synergies between the companies. It took some time to materialize, but by integrating the companies, the business is now headed in a much better direction than where it was at the time of the sale.The key titles - many of which had flattened out in circulation - are doing very well. Investments are being made to revitalize and sustain some of the beloved brands that otherwise might have faded. And the affinity-based strategy of supporting the Food / Entertaining and Home / Garden titles with specialized divisions, related assets and integrated marketing, is clearly designed to give the Reiman titles a great chance for a long and successful future!Change isn't easy, but it is necessary in this rapidly evolving media landscape. We will continue to look for smart ways to bring the best content to our readers. They will ultimately decide if their interests are being served.
Ellen MorgensternDirector, Public RelationsReader's Digest Association


And, if you are still with me, Bob's respond to Ellen:

Ellen: I re-posted that in innocence without an agenda. On Samir's site it was listed as a recent November release and appeared new. While on the road, I checked my database as best as I could, and, although it sounded familiar, I couldn't find that I had sent it out before. Mea culpa.

As you might expect I am an epicenter of an enormous amount of information and industry-wide emails. I have received dozens and dozens of emails on and about RDA, Ripplewood and Reiman. My guess is that it was this information overload that made me think that Samir's article was new paralleling most the letters I have received. I will gladly write an editorial correction if you would like or empower you to write a response to my readership.
- Bob Sacks

BoSacks Readers Speak Out; Reiman, Ripplewood, and RJ Reynolds

BoSacks Readers Speak Out; Reiman, Ripplewood, and RJ Reynolds
www.bosacks.com


Re: The Sell: Why You Need Fanboys, by Andrew Ettinger
Ettinger's article on branding was very interesting, but it seemed to me as if he missed an important point.

It's a common mistake to think that the sole purpose of branding is to increase sales. That's true, of course, but it's only half the story. Well-built brands are able to charge a premium price.

It's interesting that given the choice of two distilleries to visit, Jim Beam and Maker's Mark, Ettinger turned to the more expensive brand. This sort of reinforces the axiom that in any given market the leading publication can (and should) charge higher CPMs.

Give him credit. Many of us in this industry have been driven to drink but he's the only person I know who got an article out the experience.
(Submitted by a Publisher)

RE: BoSacks Speaks Out: Mea Culpa on RDA, Reiman and Ripplewood.
>> The writing has been on the wall for some time that a "no advertising" model no longer works in this day and age. <<

Has anyone told Cooks Illustrated or Consumer Reports or Consumer Digest? Producers of expensive subscription-only special interest newsletters? Woodworking Magazine? Public broadcasting? Have the people at RD tried searching online for the terms magazine and "we accept no advertising"? If they mean that a no-advertising model won't work for the specific way they want to do business, that might be true. But to assume that there are no ways of making this work is foolish.
(Submitted by a Writer)


RE: BoSacks Speaks Out: Mea Culpa on RDA, Reiman and Ripplewood.
Bob: All the nice responses and responses to responses are interesting. At the end of the day, the jury is still out. Let's wait and see what the vote is from the only people in the equation who count. They (the Reiman subscribers) are the ones who eventually pay all of our collective salaries, and their decision is final, and binding. Looking forward to your next update.
(Submitted by a Senior Director of Mfg & Dst)


RE: BoSacks Speaks Out: Mea Culpa on RDA, Reiman and Ripplewood.
Maybe more companies should directly engage and respond to your's and our rants and raves about what is happening in the industry. I can only see good things from this type of exchange. Keep the content flowing Bob!
(Submitted by a Production Director)


RE: BoSacks Speaks Out: Mea Culpa on RDA, Reiman and Ripplewood.
This is just another example of Wall Street autocrats and pillagers, buying for less and selling for more. It is their right and privilege to do so. It is part of the American dream and current style of doing business, but as a life long publisher it sickens me. I have been in the business for 40 years, publishing my own titles for 30 years. I too, might sell my business to Ripplewood, and they might buy it. But I would cringe at the devastation I would leave in my wake. We make a tidy profit here with several very popular titles. I wonder what Roy Reiman is thinking now? I wonder what advice he would give to me and other similar publishers?

Re; RJ Reynolds to stop print ads next year
Bo: When I joined min 20 years ago, tobacco was a key magazine ad category, ranking just below automotive and direct response. And the Magazine Publishers of America was adamant about protecting tobacco ads from regulation. (Rep. Henry Waxman/D.-Calif. was the chief protagonist.)

Now, it is almost nonexistent, so the news of R.J. Reynolds halting print advertising barely raises a peep.
(Submitted by an Unknown Professional)

Re; RJ Reynolds to stop print ads next year
Let's call the tobacco industry giants what they are - Merchants of Death. And let's also call the publishers who have accepted the money for print ads promoting smoking to their young and impressionable potential customers what THEY are - accomplices to the Grim Reaper. Publisher's and Ad Sales Directors are all interested in one thing, and one thing only, and it ain't ethics! (Full disclosure - I'm a non smoker, and have been since my grandfather died at age 55 of lung cancer after having smoked two packs of Lucky Strikes a day for his last 40 years.)
(Submitted by a Senior Director of Manufacturing)


Re; RJ Reynolds to stop print ads next year
Aha, another good reason for me to NEVER have accepted cigarette ads in the first place!
(Submitted by a Multi-title Publisher)

Google and Other People's Content

Google and Other People's Content
It sticks ads all over. But to maintain growth, it may need to own the places it puts them
BY Jon Fine
http://www.businessweek.com/magazine/content/07_49/b4061083.htm

The eternal story line in media is "Google is moving into [fill in the blank]." In recent weeks, Google announced its Android operating system for mobile phones and its OpenSocial standard, which will link applications across major social-networking sites, so long as (for now, at least) they're not named Facebook. As several blogs discovered, in November the company filed a patent application for a Google magazine of sorts, which would allow users to collate Web content around which Google would wrap targeted ads. It's also launching a job ads initiative.

All of which multiplies the number of arenas into which Google can sell advertising, which provides 99% of its revenue. The formula is familiar: Sell ads, in many cases around content Google doesn't own; turn over the bulk of that revenue to the owner of the content; repeat until the end of time.

Google's revenues almost tripled, to $11.8 billion, in the first nine months of '07, so it's hard to argue with its approach. But, really, how long can this go on? Not even the most ardent Google apologist claims its profits will balloon by the billion forever. Some perched in lofty places throughout the media biosphere advance a quietly radical notion: Google will start buying content companies. In fact, they say, Google will have no choice.

EYEBALL HUNTERS
This doesn't happen today or tomorrow but somewhere down the road, as the torrid growth tails off. The reason is AdSense, Google's business that runs ads around others' content and pays the owners the bulk of related revenues. (For the first three quarters of 2007, AdSense accounted for 35% of Google's gross revenues.) This business is less profitable than AdWords, which runs targeted ads around Google's search results. And there are indicators that gap will widen. The costs for eyeballs will only go up as the other big online ad network competitors-Microsoft , Yahoo! , and AOL -all tussle to lock up sites that generate lots of quality traffic, of which there are a limited number. (For an online ad network, more traffic equals more data equals better targeting equals more money. Microsoft's $240 million bought only 1.6% of Facebook, but it kept that traffic from Google.) Google's traffic acquisition costs-which include fees paid to content players-come to almost 84% of its AdSense revenues in the third quarter.

Owning some high-traffic sites, however, does away with revenue splits and immediately boosts profit.

Remember that "content" doesn't have to mean "television network." "Content" can simply be "information you sell ads around." It would be insane for Google to buy New York Times Co. a cost-intensive entity operating in a severely stressed sector. It may not be insane for Google to load up on properties like Landmark Communications' Weather Channel-or, better, the competing Web site Weather Underground, which would be cheaper. That's info everyone wants, and creating it doesn't require an army of reporters and producers.

This idea, of course, runs wholly counter to Google's reigning ethos. Its stated goal is to organize the world's information, not buy it. Google-ites will tell you the culture is allergic to owning content. And companies begun, and defined, by programmers have struggled to navigate the byways of media, as many failed initiatives from AOL and Microsoft attest. (Don't recall Microsoft's Sidewalk online city guides? You're not alone.) Google intimates also say that the company's we'll-partner-with-everyone approach would be hurt by owning content, given the incentives to favor what one owns.

But Google already owns sites traditional media outlets view as rivals, like Google News and YouTube , and few partners have fled. As long as Google's ad network delivers the goods, traditional players won't opt out. (Giving up a few million dollars a year from Google is not an option these days.) Google's defenders say it's more likely to invent new lines of business, as it's trying to do with Android and OpenSocial, among others, to stoke growth. But as generations of past companies have discovered, there comes a time when it's easier to buy a way out of a bind than to invent one.

RJ Reynolds to stop print ads next year

RJ Reynolds to stop print ads next year
By JOCELYN NOVECK, AP National Writer


The R.J. Reynolds Tobacco Co., which has been under intense pressure from anti-smoking groups and members of Congress over print ads for its cigarettes, said Tuesday it would not advertise its brands in newspapers or consumer magazines next year.

The company had been criticized sharply for both its colorful and feminine Camel No. 9 ads, which appeared in fashion magazines and were seen as cynically aimed at young women, and also for a recent ad in Rolling Stone.

In that ad, four pages of Camel cigarette ads bookended Rolling Stone's own material on independent rock music, which was presented in a cartoon-like format. That angered anti-smoking advocates, who said it appeared the whole thing was a Camel ad - and that it recalled the old "Joe Camel" cartoons that were banned because they appeared aimed at children.

R.J. Reynolds spokeswoman Jan Smith said the decision, first reported Tuesday in the Winston-Salem Journal, had been made sometime before October and was unrelated to the Rolling Stone controversy.

In a telephone interview, Smith called the move "an effort by the company to enhance and sharpen the effectiveness and efficiency of its marketing programs." She did, however, say the company had taken into account, at least in part, the protests over the Camel No. 9 ads.

"Obviously tobacco industry issues are in mind with every decision we make," Smith said. "A result of this is there should be less controversy over cigarette advertising in magazines and newspapers, because we won't be doing it."

The Washington-based Campaign for Tobacco-Free Kids, which has long protested the Camel ads, called the company's decision "more a strategy to deflect criticism than a real change in marketing."

Matthew Myers, president of the group, said it was unfortunate that R.J. Reynolds had not committed to permanently stop print advertising. Smith said the company, based in Winston-Salem, N.C., would make decisions about future years at a later time.

Myers also said the company has far to go to curtail egregious marketing practices, which include promotions at bars and nightclubs.

"What they've done is just to limit the ads that have prompted the fiercest criticism, because they are the most visible," Myers said in a telephone interview. He noted the company is still engaging in direct mail advertising, heavy promotion at retail outlets, and price promotion "for the brands kids like most."

The Camel No. 9 ads, launched early this year, appear on thick, shiny paper in fuchsia or teal and are adorned with images of roses and lace. A group of Congress members, led by Rep. Lois Capps, D-Calif., have been urging women's magazines such as Cosmopolitan, Vogue and Glamour to stop accepting the ads, saying they threaten the health of the teenagers and young women who form a large part of their readership.

Capps on Tuesday called the Reynolds decision a "token concession" that was "a day late and a dollar short."

In fact, the print ads account for only a tiny portion of what the tobacco industry spends on marketing. But they've been notable because they often appear in magazines side by side with articles promoting women's health.

Print ads for tobacco are banned in a number of countries, including throughout Europe, but legal in the United States. Tobacco advertising was banned from radio and TV long ago, and more recently from billboards.

A major tobacco report issued earlier this year by the Institute of Medicine, a branch of the National Academy of Sciences, recommended that print ads be restricted to black and white text only - no images.

A number of magazines refuse to accept tobacco ads. A few are Self, Men's Health and Money, according to the Tobacco-Free Periodicals Project.

Copyright © 2007 The Associated Press. All rights reserved.

Paper Costs Leaves Publishers Shuddering

Expected Rise in Paper Costs Leaves Publishers Shuddering
Mags Could Be Paying 25% More Next Year Due to Mergers in Pulp Biz
By Nat Ives
http://adage.com/mediaworks/article?article_id=122187

Magazine publishers are already facing way too many rising costs: technology investments, postage, editors both diva and deserving. But the seemingly mundane budget line for glossy paper is suddenly the one everyone is worried about.

Welcome to our hell, publishers said last week.

"I frankly became more of a quasi-expert than I would want to be, only out of necessity," said John P. Loughlin, exec VP-general manager at Hearst Magazines.

The weakness of the American dollar is increasingly restricting publishers' overseas options.

Seller's market
More worrisome, paper seems to be emerging from a competitive era of cyclically rising and falling prices. This year already has seen increases implemented and announced. Now structural changes, including mergers and a growing role for aggressive private equity, look likely to drive prices up next year by another 20% to 25%, Mr. Loughlin said.

The industry hasn't seen a spike like that since 1995, when announced increases led to a brief run on the paper market that echoed Dutch Tulip Mania. This isn't spare change, either: Paper comprises some 15%-20% of publishers' costs, Mr. Loughlin estimated. One big publisher said it's still unclear how big a hit is bearing down. "We're still examining what we believe specifics amount to, and whether there are benefits to our scale," an executive there said, speaking on the condition of anonymity.

Planning the right strategic response is complicated by that fact that visibility, beyond such rough projections, remains limited. Paper manufacturers aren't too helpful on this score. A spokesman for AbitibiBowater, the result of an October merger and now the third-largest publicly traded paper company in North America, declined to discuss publishers' fears. "We cannot speculate on pricing on a going-forward basis," he said.

A spokeswoman for NewPage, which hopes to close on the acquisition of Stora Enso's North American operations by the first quarter, did not respond to a voicemail and an e-mail seeking comment Nov. 21.

Hearst ready
Mr. Loughlin said Hearst would get by. The company increased cover and subscription pricing on many of its magazines this year and is considering a couple more hikes next year. "We have tried to be thoughtful about our structure in the good years and in the tough years relative to paper prices," he said. "Nobody wants to be here, but frankly we're in a good position in that we've managed our costs and don't have to change the physical specs on the magazines."

The other obvious recourse, trying to pass costs along to advertisers, just won't work well enough for everyone, said Malcolm Campbell, publisher of Spin. "It's going to put some people out of business," he said.

And he didn't just mean the indies. "Don't kid yourself," he said. "There are a lot of large-publishing-company old titles that are very marginal anyway. You're going to see a lot of icons going down if paper prices go up that much."

Spin, he said, will continue just fine in print, even without exploring options like switching to cheaper paper stock or reducing the magazine's size. "There may be some adjustments," he said. "I don't think we're going to go that route. We'll find other ways."

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Paper prices "must double" says M-real chiefBY William Mitting, PrintWeek

http://www.printweek.com/paper/news/768484/Paper-prices-must-double-says-M-real-chief/

Paper prices must double to make the paper industry economically and environmentally sustainable, Andrew Gun­man, regional director of paper manufacturer M-real, has warned.

Speaking at the annual PPA Magazine Conference at London's Millennium Hotel last week, Gunman said the industry had to "pay the right price" for paper to save the environment and secure its future.

"Increased paper costs would reduce waste and force the industry to consume less," he said. "The paper industry needs more money to build a sustainable future."

Gunman added that, while most publishers do not insist on the environmentally friendly FSC certified paper, there has been increased demand from large retailers such as Sainsbury's.

"We have seen a 100% increase in demand for FSC paper in 2007 which is pushing up prices," he added.
Bemoaning the cheap price of paper in Europe, Gunman said the supply and demand mismatch was the fault of the paper industry, which had sold too cheaply.
He added that the low prices were destroying communities across Europe as paper mills are forced out of business.

Gunman's comments will be met with concern among the printing industry which is already struggling with increased paper prices.

One industry insider said that paper-based marketing and information communication has to stand up economically against other delivery channels. As paper prices increase, it makes these other channels more viable, threatening the industry.

In 2006, the dollar price of softwood kraft pulp increased by 22%, a cost which was passed onto printers.

Digital Divide

Digital Divide


Having learned to love the Web, former print editors urge magazines to carve out stronger online identities
Mark Golin, editor of People.com, looks back with some humor on the early days of his Web career in the late '90s. He had proudly created some new features for Rodale's Prevention.com, only to discover people weren't clicking on them. "They were just beautiful looking," he recalled. "God help anyone trying to figure out how to use it."

For Golin, who spent much of his career in magazines including stints as editor of Maxim and Details before making the jump to the digital space seven years ago, the episode made him realize the complexity of building a successful site, with all the visual cues that are needed to keep users engaged and entertained.

"One of the immediate things that hit me is how much more complex production online can be," Golin said. "Content packages are planned months in advance. You almost start to think about a game of three-dimensional chess."

And while most magazine publishers now realize they have a bright future online, he and other former print editors agree that many of them have fallen short in adapting their magazines to one of the biggest threats -if not the biggest threat-to their existence.
To make their brands succeed online, magazine editors need to rethink practices and assumptions that are suited to print, these former print editors say.

"I think they need to think about the Web as a completely different animal," said Michael Caruso, a former editor of Men's Journal and Details who founded The Daily Tube, a site that trolls the Web for the best new videos.



Traditions that have made print magazines strong can be a liability online, former print editors said.
Given the interactive nature of the Web, magazines, with their "experts telling a large audience what to think and what's new," have a diminishing role to play, Caruso said.

Keith Blanchard, onetime editor of Maxim who worked on the sites of Wenner Media's Rolling Stone, Us Weekly and Men's Journal, sees print brands struggling to be responsible and authentic at the same time. "Perez Hilton was able to come up out of nowhere because he didn't care about the legality of what he was doing," pointed out Blanchard, now vp, director of programming at videogame maker Kuma Games.

Online, it's content that matters, not the source, he continued. "Newsweek, Time, don't mean anything, but Justin Fox does," he said, referring to Time's business and economics columnist. "I don't think people are very brand-loyal online."

Blanchard and others say too often magazine sites offer no unique value, have loads of information that's poorly organized and too closely mimic their print counterparts. They urged magazines to carve out stronger identities online.

One way is to recognize that sites don't have to mirror print editions, Golin said, noting that People.com is more celebrity-oriented than its print counterpart.

"I think the main thing is for them to have a very clear mission statement," he said. "What is the need on the part of the user that you're fulfilling? I see a lot of magazine Web sites where I don't know why I've come here, I don't know why I'd come here regularly."

Given the Web's user-directed nature, Blanchard suggested magazines' sites do more to let visitors customize their experience, by geography or other factors.

Since making the jump to online, these digital denizens said they've had to adjust to a culture of heightened speed, intensity and technological change.

"The culture is a lot more casual, the hierarchy is a lot more fluid," said Jimmy Jellinek, who was replaced as editor of Maxim after its recent ownership change and is now consulting at Heavy.com, an entertainment site geared to young men. "There's not the sense of power derived from a masthead. But at the same time, there's pressure to grow profit. There is a constant intensity because the Web is constantly changing. Here, you're working on a day-to-day basis. You constantly have to be plugged in."

While digital defectors don't seem eager to return to print, they still see strong value in the service, long reads and escapism it provides. Said Jellinek, "The one thing the Internet doesn't do is provide context. You get instant information, but it's not analysis."

Price hikes hit Bauer titles

The once-seemingly unstoppable celebrity weekly category is showing more signs its growth is peaking. It started with Wenner Media's Us Weekly and Northern & Shell's OK! missing rate bases on multiple issues in the first half of '07, followed by American Media's Star cutting its rate base to 1.35 million in July, from 1.5 million.

Now, in the two weeks since its price increased by $1 to $2.99, In Touch Weekly's single-copy sales were at least 25 percent below their 1.3 million average for the first half of 2007, according to preliminary sales estimates provided by three industry sources. At sibling Bauer Publishing title Life & Style Weekly, which also raised its price by $1 to $2.99, single-copy sales were down at least 10 percent from its first-half average sales of 744,294, per the sources' estimates.

To be fair, two weeks is a small amount of time to determine whether or not a price increase has a long-term impact on sales, which can be affected by a host of factors. Fall is generally a slow time for celebrity weekly newsstand sales, for example. According to an industry rule of thumb, a title can expect a percentage decline in newsstand sales equal to half the cover price's percentage increase, however.

Cover prices have been trending up this year across the celebrity category, but Bauer's price increases were seen as especially risky because of the 50 percent hike and the company's reliance on low cover prices to support its newsstand growth. Ian Scott, president of Bauer advertising sales, would not confirm or comment on the latest newsstand sales, but did say Bauer would continue its record of overdelivering on rate base. "That's what we've done in the past and that's what we're committed to doing in the future," Scott said.

Meantime, newsstand sales of other celeb weeklies have stayed relatively even, according to source estimates. If anything, Dave Leckey, executive vp, consumer marketing of American Media and publisher of Star, noted, "I think [the Bauer price increase has] benefitted us."