3 factors that will lead to digital's eclipse of print as the dominant source of magazine media revenue
There is an odd form of delusion in the publishing world, characterized by a resistance to reason in the face of actual facts. This inability to recognize modern business trends is easy for most Millennials to understand, but hard for many magazine traditionalists to reconcile. It is the concept of print's current and future position in the grand scheme of revenue production in the information distribution industry. You see, the cause of this misunderstanding is that print is still the major source of revenue for most traditional publishers and that colors their thinking, even as paper-produced revenues on the whole continue to steadily decline.
To be very clear, the future of our industry and our ability to make an honest living is digital. The only real question on that subject is when the watershed moment of digital supremacy will arrive. I think that when we look back at the end of 2014 we will see that that moment is happening now.
Obviously there are many digital only publishers today who are already making a fortune in territory that was once a print-dominated field. Newspapers, news magazines, and assorted niche publications used to rule the info-sphere. Now sites like Buzzfeed, Vox, Upworthy, Flipboard, and many others satisfy the public's thirst for news as it happens. It makes perfect sense that "news" would be the first to fall to the digital axe and behead journalism as we once knew it. Over time our perception of news has changed. Now news isn't news if it is in any way not of an immediate nature. It wasn't always that way. In colonial days news took six weeks to cross the Atlantic and when it got here, it was well received as real news, true, and valuable. Now we receive news of events as they happen in real-time, which is something that no paper-sourced delivery can ever hope to contend with.
Yet even taking those new successful news sites into consideration, the predominant method of generating revenue for traditional publishers is, for the moment, their print products. There are three main contributors to the headspace of this pulp addiction and all are easy to understand.
Leave it to the wordsmiths of the publishing universe to dismiss the great bard's advice and call an old cabbage, a rose with a piquant odor. There is a big debate going on in our industry and under all the fluff and misdirection, it is about lying and deceiving our public.
This pox on our industry is called Native Advertising. What a brilliant use of words, so clean sounding and innocent. It is nothing more or less than the selling out of our souls and our integrity for less than a fleeting buck. An editor should understand advertising and how any publication works, survives and creates revenue. But neither an editor nor a disguised editorial page should ever be advertising in hiding. Such a situation dilutes the whole foundation of our small universe and stains journalism in putrid colors. If one of your articles is suspect, the whole publication is corrupted and suspected to be what it is - a shill for promoting something and anything for a fee. It is the prostitution of an industry suffering from the lack of a spine and the lost business creativity to produce honest revenue.
BoSacks Speak Out: Sometimes I just have to put the tequila aside and deliver a sobering report to the industry to offset some irrational exuberance. I do this because I love the magazine media industry, and I don't want anyone to misinterpret the facts and true conditions of our industry.
First, we are not dead, dying or otherwise crippled into irrelevance. Print will be around for generations to come and be loved and cherished by many. That being said, whatever you read elsewhere, we are still and continue to be in a position of readjustment and weight loss. We are no longer the dominant player we once were. Sure there are more magazines than ever before, but that notation is irrelevant when you consider the fact that we continue to sell fewer and fewer magazines year in and year out. And revenue, despite many singular and quite excellent print successes, continues to decline in the industry. The pinnacle for magazines based on quantity is long gone and a decade in the past. Click Here for the full Article
For the last twenty years I have been publicly critical of the process and accountability—or lack thereof—of rate base, yet it never occurred to me to write an article about it. The truth is, I don't recall anyone writing an article about rate base from a positive or negative viewpoint.
From my perspective, rate base is a convoluted tool designed to produce distorted circulation figures. Yes, auditing is an attempt to verify with some precision and prove to the advertisers that a certain number of people may have picked up and read your magazine. But imbedded in this arcane system is a potential for trickery and a temptation to abuse the well-meaning audit results to achieve what amounts to some meaningless readership number.
Since I wanted to express more than just my opinion on this topic, I reached out to industry leaders from all segments of our noble franchise. Most of the people I spoke to in the research for this article focused their observations on the abundant abuse of rate base and its antiquated nature.
I spoke to magazine media pundit and Publishing Executive columnist D. Eadward Tree and started by asking, "What is the problem with rate base?" He says, "I think we should define the problem clearly: Is it circulation audits? Rate base in general? Or inflated rate bases? I don't see a problem with the concept of rate base in general: We make a promise to our advertisers about who will see their ads, then verify that they got their money's worth by having the circulation audited. What gets us into trouble is inflated rate bases, which force publishers to do desperate, stupid things like offering $5 annual subscriptions, using negative-remit agents, and getting into trouble with the Federal Trade Commission." FOR THE COMPLETE ARTICLE CLICK HERE
I think our publishing industry is at a crossroad and we have been approaching it for quite some time, at least since 2007 and surely since 2010, with the introduction of the iPad. Perhaps Mary Berner, CEO of the MPA, has it right when she now calls our former publishing houses Magazine Media.
In this day and age how would you define a magazine publisher? We are no longer what we once were, because our readers and, most importantly, our revenue streams are very different. And they, too, are continually becoming something else. What we are becoming is not less relevant, but is much harder to define and even more confusing as we proceed into the near future.
It seems to me we are suffering from a strong identity crisis. Pre-2007 if you were a publisher you were for the most part in the print business, and the bulk of your revenue was derived from print. Now a publisher can be called a publisher just by hosting a web page, sending out a newsletter, or a blog or, of course, a printed magazine.
The concept of magazine media does combine all the available platforms into one descriptive business type. But changing our business identity doesn’t solve the problems of lost revenue and shifting reading patterns of our current and former consumers.Even the understanding that there is a universe of multiple platforms beyond print doesn’t help most publishers. Sure the big guys have plenty of dough to throw at as many substrates as seems prudent, and they do just that. What about the moderate to small publishers? They don’t have the money or the internal infrastructure to be so omnipresent. HERE FOR THE FULL STORY
Assuming that we are all adults here, it is time for a frank and honest conversation about the future of print. Never in the pages of this newsletter have I proposed the death of print, not even its near death. That is not happening and will not happen any time soon. But, my goodness! we do need to collect our thoughts and maintain some sobriety. Both Samir and Mr. Dead Tree have published recent articles about this non-death. Samir calls it, "the amplification of print in a digital age." I can live with that. But in my judgment the exuberance needs to tempered just a bit with the flip side of reality.
Below in a chart produced by Dr. Joe Webb is the problem as I see it. Even with all this exciting "amplification," where is the MONEY? As an industry, printed books, magazines, and newspapers have been non-stop losing revenue year in and year out since 2007. I am fine with all the brouhaha that this title and that title went from the web to print. I am ecstatic that some titles are being revived, and I think it is wonderful that there are new titles each and every year. But the money, that revenue that feeds our children, is diminishing - maybe not for all, but clearly for many and maybe, according to the chart, for most.
I believe there is, in fact, a bottom line somewhere where printed products as an industry will do just fine, but we aren't there yet. I ask you, is this a chart to brag by? If you saw this chart at your Wall Street broker's office, would you buy this stock to secure your family's mortgage? I have stated many times in these pages that aggregated data doesn't reflect single titles and that there are many successes that we can and should brag about as an industry. But those are singular cases and NOT reflective of the industry as a whole. CLICK HERE FOR THE COMPLETE STORY
There is an interesting law of nature that parallels itself in all business environments. The law that "nature abhors a vacuum" is as strong in any revenue producing ecosystem as it is in nature. This "law" is at the heart of many a successful entrepreneur, and it is a strategic advantage often missed by corporate shirts. These nimble entrepreneurs have the ability to see the vacuums that are constantly created in the wake of larger organizations' somewhat lumbering journeys.
I bring this up because there has been a recent plethora of pundit conversations lately about the death of journalism based on the news that the editorial department at Time Inc. will now report to the business department. Indeed this move by Time's new management breaks the time-honored separation of church and state rule that exists in many, if not most, reputable publishing houses.
This separation has such gravity that outgoing editor-in-chief of Time Inc. Martha Nelson sent pieces of the "Pope's Miter" to many Time Inc. editors. The whole miter had previously been passed from the company's outgoing editor-in-chief to the incoming editor-in-chief. The miter, which is traditionally the hat of the pope or other religious figures, symbolized the importance of keeping the editorial content of magazines pure and from being unduly influenced by advertisers' needs, wants and desires. Ms. Nelson, who left Time Inc. so as not to be part of a newly perceived and sullied tradition, sent the following note:
"This fragment comes from the 'Pope's Miter,' which resided in the office of the editor in chief of Time Inc. While the miter was passed on in jest, it symbolized the earnest belief in editorial independence, truth and integrity. Now that responsibility rests in your hands."
The theory is that for the assured integrity of any house of writers, there needs to be a strong separation of the editorial and the business environments, so that the written word is not unduly influenced by the seductive dollar, thus giving editors the freedom to explore and speak the truth on any given subject or company, even an advertiser. CLICK HERE FOR THE FULL ARTICLE
BoSacks Speaks Out: It was my intent to cover the whole MPA-AMC in one report. But it turns out that to do the conference any justice it will take several essays, as I have over ten pages of notes and those are without any personal commentary. So I will start at the beginning and as the pages fill up I will conclude on another posting. President and CEO of the MPA Mary Berner opened with her usual verve and esprit de corps as the opening keynote speaker at the AM²C 2013 Conference. She opened with the comment that “I’m not pissed anymore at least about where we are and where we are headed as an industry.” I can’t address what Mary may or may not be angry about, but I agree that we have made great strides in adapting to the necessary changes that face our industry.
But those strides have come in some strange ways at the cost of our older identities as print magazine peoples. I confess that either I or the industry, or maybe both, are a bit schizophrenic. By that I am referencing my comments about the AMC last week when I suggested that we open every conference with the benediction, “Print is not dead, print is not dead,” and we complete the opening prayer by declaring to anyone who will listen that 90% of our revenue is still print revenue. I went on to question why was it that almost nowhere in any industry convention that the actual technicalities and best practices in the revenue producing print product were discussed. What about a few lessons on print efficiencies, best cover practices, how to create the best headlines, or the latest secrets of newsstand success stories? (There are a few exceptions to this rule, but few and far between)
In Esquire's approximately 286 page October issue, I read a quote from Arthur Miller that reminded me of the publishing industry in general, and of my experience at PRIMEX last week. "Fear, like love, is difficult to explain after it has subsided, probably because it draws away the veils of illusion as it disappears." Indeed, the print industry has had the fears, misconceptions and its illusions drawn away as we move forward and adjust our business plans to 21st century communication. To me this adjustment was clearly evident at PRIMEX, which has been chaired with great success for several years by Laura Reid, VP of Production at Hearst Magazines.
David Steinhardt, President & CEO at IDEAlliance, the organization that runs PRIMEX, opened the day-long conference in NYC saying we are at the intersection of interactivity. How does it grow print? How does it work with print? What are the best practices for the total supply chain? How do we work with the new technologies and create increasingly better workflows?