Route Cause

Knowledge@Wharton has delivered just what we need—one more wakeup call for the publishing industry: And no, don’t reach for the snooze button.

The report, “Urgent Deadline for Publishers: Find a New Business Plan before You Vanish,” quotes a number of Whartonians from various disciplines. It was published: January 07, 2009. We thank Bob Sacks for distributing it.

The lead paragraph sets a tone:

If 2008 were an ordinary year -- one during which iconic American firms like General Motors didn't teeter on the verge of bankruptcy, the stock market didn't lose a third of its value, and foreclosures, hemorrhaging 401(k)s and holiday retail blight weren't in every headline -- the precipitous decline of the nation's newspaper business might have been the biggest financial story.

After some No-the-sky-really-is-falling statistics, the piece offers a bouquet of alternate business routes. They include philanthropic, niche, pay, participation, commercial.

The pay route, suggested by  marketing professor Eric Bradlow, co-director of the Wharton Interactive Media Initiative, is particularly interesting. The report summarizes his view this way:

subscriber strategies aren't always doomed. Companies from Dow Jones, which publishes the Wall Street Journal, to any number of small trade magazines that offer highly specialized information to affluent subscribers manage to keep content behind a for-pay firewall, defying the conventional wisdom about an Internet audience that demands freebies. The key is a degree of specialization, whether by locality or by subject matter, that the traditional general-interest paper didn't deliver.

It’s more correct to term this approach the “proprietary route.” It’s not that the publication’s information and/or unique expression are for sale (which they are). It’s that the consumer can only get this material in one place. If content is king, exclusivity of content is emperor.

Not included in the pay or proprietary route was the notion of delivering the publication directly to a consumer's portable reader and bypassing the web entirely.

The report focuses on newspapers but it doesn’t take a great stretch to apply it to magazines. More than anything else, this Wharton report is a great shot of caffeine. Now is not the time to slow your roll.

The Earview Mirror

Which would you prefer?  The  ear half empty or the ear half full?

 Digital Media Wire Daily reports that 2008 music sales  reached 1.5 billion units, beating the 2007 total by 10.5%. This data, which encompasses the sales of songs, albums, vinyl, music videos and ringtones comes from Nielsen SoundScan. According to the article, “Sales of physical albums like CDs fell 20%, to 362.6 million, and are off by 45% since 2000. Meanwhile, digital album sales were up 32% in 2008, to 65.8 million units, and digital track sales grew 27% to reach a record 1.07 billion.”

To be fair, in 2008 vinyl gave its best showing  since 1991, the year SoundScan started tracking these numbers. Consumers purchased 1.88 million vinyl albums.

Is all of this good or bad news for magazines? It depends on whether you’re looking through the windshield or the rearview mirror.

Of Buggywhips and Manifestos

Two recent posts in Samir Husni’s Mr. Magazine blog are informative, fascinating and unintentionally poignant.

The earlier (18 December, 2008) is an interview with Time magazine  Managing Editor Richard Stengel. It mostly discusses Time' s 2008 "Person of the Year" selection and issue. Near the conclusion, Stengel points out that this issue did very well on the newsstand and uses this as a metaphor for the viability of print. He states:

Our election commemorative issue was the largest newsstand seller since 9/11 and, you know, people want some historical object. I think that is one of the signs of health for print because people like things. And that will never go away. Our election commemorative issue was the largest newsstand seller since 9/11 and, you know, people want some historical object. I think that is one of the signs of health for print because people like things. And that will never go away.

 

This might be considered a case of not seeing the forest because of all the dead trees. But the magazine's power comes from its format of being a storehouse of information and ideas — and not its future status on "Antiques Roadshow." If the common garden-variety, or should we say house and garden variety, magazine survives because of its physical properties, rather than its emotional and intellectual properties, I'd suspect that all was not well.

The second and more recent Husni posting (1 January, 2009) is a deeply felt manifesto. He takes a number of conventional wisdom statements about the current climate for magazines and offers his own, cheerier responses. For example:

You continue to predict the death of print; I will continue to promote the endless innovations possible in print.

Warm, fuzzy and upbeat as his affirmations are, they hardly can be considered the basis for a business model.

After years of refining its approach to marketing, the magazine industry emerged in recent years with a glossy, stylish straitjacket. When the business environment changed, the industry couldn't or wouldn't alter its practices. New cataclysmic forces overran the magazine industry and did not spring from one source. The list is brief: wholesaler consolidation, the collapse of stamp and sweepstakes subscription programs such as Publishers Clearing House, and the World Wide Web’s accelerating growth. In other words, magazine industry saw an erosion of retail sales and distribution patterns, a body blow to subscriptions sales and a two-front (readership and advertising dollars) challenge from a ubiquitous new medium offering information and opinions for free.

And now the great recession. Any of the first three hits was a signal to rethink and change directions.

The recession? it deprives publishers of resources needed if, by some chance, they actually figured out a way to bring their enterprises into the 21st century. Which brings us to why samir Husni’s prescriptions are quaint.

 We are seeing a societal trend toward digital media. This trend is confused with the prevalence of the World Wide Web but actually is discrete. The Web role here is not so much as a way to experience content, but as a vehicle for distribution of content.

 The developing marketplace wants its media digital and mobile.. In music, this is seen in the move from CD-ROMs to MP3 players. In books it is seen in the move from paper to kindle and Ii-phone. In films the move is from DVDs to set top boxes. In magazines it is seen in the move from print to . . . well . . .nothing yet.

If we understand that the magazine does not have to exist in the form of print to be a magazine, the magazine industry will survive. Otherwise a warm place will be reserved for magazines right next to buggy whips on the “Antiques Roadshow”