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.

Indicators, Shmindicators

There’s a simple formula that always helps when writing a blog about magazines. Just start with the phrase, “Samir Husni writes, “ . . .” and then blithely go on to agree or disagree with quoted comment, while adding a riff of your own. What’s the point of being involved with magazines if you can’t be formulaic? So here goes.

In yesterday’s Bulldog Reporter’s Daily’ Dog, “Samir Husni writes,

“When sporting events see small crowds, you don't hear the managers bemoaning the death of a sport; when stocks prices fall, you don't hear CEOs complaining that money is no longer a viable product; but for some reason a drop in new magazine launches makes our industry think our days are numbered.

The numbers this year are lackluster at best, but there is no reason to think this is the first step down a slippery slope to the death of the magazine industry. Just as many other industries experience every few years, we are seeing nothing more than a market correction. I said a few years back that we would see something like this during 2007 and 2008 with a rebound to normal form in 2009.”

Okay. Professional sports are not going out of business and money is probably here for the long haul. BUT some sports do crash and burn when they can’t take root. And some sports franchises move to (they hope) greener pastures. When people with means find one marketplace isn’t working, they move their action into an entirely marketplace.

I’m not sure that the quantity of magazine launches is a reliable indicator of industry health. I suspect they certainly are a good barometer of both individual and zeitgeist passion, and perhaps a slight indicator of the prevalence of bipolar disorder. The quantity of new specials and annuals might deserve notice. These are forays by experienced publishers into established markets.

The article’s main thrust was to remind PR practitioners of the classic rule of pitching: Know thy audience. In this case, Samir Husni was advising publicists that mass email blasts are not as effective as targeting niche publications and niche specialty freelancers.

It got me to musing, possibly even thinking. One of my wonderments about the consumer magazine segment is how little it relies on marketing to consumers. Its major marketing efforts are directed at advertisers and retailers. We understand why, of course. But isn’t the magazine a consumer product? Aren’t quality, quantity and loyalty of readership the foundation on which advertising and single sales are based? Or am I missing something?

Okay, I have a flair for the obvious. (Why else would I have felt at home in magazines?) So here’s my two cents.

The magazine industry’s current hell only starts with cultural tsunami stirred by the Web. Yes, there’s been a migration of eyeballs to the Web. Yes, there’s been a migration of advertising to the Web. And yes, yes, yes, the Web is becoming a favored source for information and ideas.

The deeper problem is the entrenched structures and conventional wisdom of the publishing industry.

For example,The overwhelming majority of marketing and financial decisions are based, in my opinion, on enticing advertisers and retailers. Not a sin, per se. But aren’t they forgetting something? Oh yes, the readership.I

I know firsthand that publishers like, respect, maybe even love their readers. They adore the reader’s passion, knowledge and commitment. But I think that ultimately publishers do not see readers as customers but as bait.