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Issue for September 2010

What Ails Publishers Most

Posted on Wednesday, September 15, 2010 at 1:40 PM

What are the top issues facing today's magazine publishers?

By Meredith L. Dias

Over the last few years, you have likely watched many publications, perhaps even some of your own, fold under the pressure of the concurrent publishing industry and economic crises. Where did those publications go wrong? What one fatal error did they all make?

The answer may trouble you: There may not have been one fatal error. As we discovered in a recent STRAT survey we conducted, there are a host of issues facing today's publishers. We asked some publishers to identify their top problems, and their lists ran a fairly wide gamut.

Here are the top ten issues reported to us:

--Advertising sales
--Monetization of content
--Postage issues
--Distribution, printing, and paper
--Social networking
--Staff cuts/issues
--Rate cuts
--Circulation and subscription
--Changing reader trends

In other words, publications have suffered over the last few years for many reasons. Many of the aforementioned issues are, of course, likely related (e.g., staff cuts and economy, advertising sales and rate cuts, etc.). Still, as indicated by our survey results, broad strokes won't paint a clear picture of the recent publishing crisis. So let's examine some of these key issues in a bit more depth.

Monetization of Content

Publishers are having trouble monetizing their content on both the print and digital platforms. Peter H. Miller, president of Restore Media LLC, lists "monetizing digital media" as his number one concern. Conversely, Bill Kinross, VP and group publisher of Meating Place, tells us that his publication is having trouble "proving the value of print when other media platforms offer such detailed metrics and print doesn't."

Perhaps the most acute comment we received was from David Drimer, associate publisher of The Forward: "An irreversible dearth of print advertising forces an accelerated focus on digital operations, and nobody has yet created a viable business model for monetizing the Web that creates as much margin as print did in its heyday."

Publishers still have not discovered a winning formula for online profitability. The surging popularity of e-reading devices and apps has provided some major rejuvenation for downtrodden publishers, but print and digital content are still learning how to coexist in a mutually profitable way.

Going Postal

Postage issues were a common complaint among our print publishers, third only to advertising and monetization issues. David Drimer says, "Postal service is very poor throughout the U.S. for periodical mail, especially on the West Coast, so timely delivery is a challenge." Doug Cooke, publisher and editorial director of JAXFAX Travel Marketing Magazine, cites "continuously escalating postal prices" as a thorn in his publication's side.

It's no secret that the United States Postal Service, dealt a hearty blow by the Web, is suffering. The USPS is currently mulling over the idea of eliminating Saturday delivery altogether. The idea must first go through Congress, but the fact remains that customers are facing planned rate increases and, likely, imminent service cuts. Unfortunately, high-volume customers like magazine publishers bear the brunt. While planned postage rate increases constitute an annoyance for the average customer, "magazine publishers would see an 8 percent price jump, according to the proposals" (according to a Washington Post blog from July). Such a steep rate hike could prove devastating to print magazines already near their breaking point.

Staff Issues

Staff cuts constitute a major concern for many publishers, but not the only one. Tim Robertson, publisher of MyMac, mentions the high turn-over rate of stable writers. Another publisher mentions high corporate expectations. Several publishers highlight the plight of their editors, who are "being stretched too thin as we do more online and through webinars and seminars," says Bill Kinross. Sara Waxman, publisher and editor-in-chief of Dine Magazine, provides a three-item list that sums up the plight of a lot of understaffed publications:

1. Sorry
2. I'm in production right now
3. No time

Peter Miller mentions another problem of particular importance in today's publishing environment: "training old media people on new media." People who have cut their teeth on print magazines must now adapt to an alien frontier, where content is up-to-the-minute and technology changes constantly. A publication's success is now contingent upon the ability to keep current with industry and tech trends. This is difficult to accomplish when staff members who spent comfortable decades in print must first learn the basics, while new media pros surge ahead with new technology and social media solutions.

Rate Cuts

A few publishers identified competitive rate cuts as a major problem. One publisher told us, "Our biggest challenge is competitors that keep cutting rates to get business, destroying the marketplace for years to come. Multiple magazines in our market are slashing rates by 50 percent or more."

This is a prime example of shortsighted publishing strategy. Just as magazines that prematurely eliminate their print editions shoot themselves in the foot, magazines that engage in competitive rate cutting do considerable long-term damage to themselves, their competitors, and their advertisers. Richard Cress, publisher of CSC Publishing, Inc., sums it up with his "Top 3" list:

1. Selling ad space.
2. At full price.
3. While the rest of the publishing world discounts to the point where they lose money on every ad!

No Catch-All Cause, No Catch-All Solution

If only there were catch-alls in the magazine industry equation. If only there were one clear problem and one clear-cut solution. But this is not calculus or grammar. The rules of magazine success aren't so rigid and, for some, this lack of structure can be intimidating. What if you make a strategic gamble and lose? What if you do everything "right" and still lose money? What if you've engaged in several rounds of trial-and-error and seen no results?

Look to other publications for inspiration, but not concrete answers. The strategy that saved one publication could ruin another, and vice-versa. Magazines A and B may share the same strategic problems, but if they serve different audiences and industries, they will require different interventions. Magazines C and D may serve the same industry, but one may have a heavy social media presence, while the other may have a more profitable print edition. There are countless possible scenarios.

Your solution may come after months of strategic meetings. It may come from a magazine consultant. Who knows? It may even come from one of your own staff members, whose revolutionary idea changes the way your publication does business.

Meredith L. Dias is research editor of STRAT and Editors Only.

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Posted in Advertising (RSS), Audience (RSS), Online (RSS), Print (RSS)

The Printable Clickable Link

Posted on Wednesday, September 15, 2010 at 1:39 PM

How QR codes and Microsoft Tags are making print publications interactive.

Print magazines are starting to offer readers clickable links to Web content. The technology for doing this relies upon capabilities of the increasingly popular smart phone genre of mobile devices. The process is simple to implement. First, the magazine prints the link in the form of a mobile tag. Here are examples of two popular formats:

A Microsoft tag.

A QR code tag.

The reader uses the camera feature of the smart phone to capture the image of the tag. Then, an application on the smart phone facilitates the connection: reader to Web content. Get Married magazine, one of the publications that has begun using the Microsoft mobile tags for both editorial and advertising content. Here is an example of one of their tagged editorial pages:

A Get Married magazine editorial page offers readers a Microsoft tag link.

QR codes have actually been in use in Japan for many years. They are used not only in print publications, but also on business cards, signs, even busses. But, the practice seems not to have migrated to the U.S. to any large extent. More recently Microsoft has begun promoting its own variety of mobile tag.

Regardless of which tag format is used, it will be necessary for the user to download an application to the smart phone. Typically, the downloads are available for free. (App for scanning QR codes: http://www.neoreader.com/download.html; Microsoft Tag reader: http://www.gettag.mobi/)

For those of you who have smart phones, we have compiled a number of links that provide additional information about the technology. Just use one of the tags above to see them. (We'll leave the list there for 60 days.)

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Posted in Online (RSS), Print (RSS)

Distressed Print Publications Making Mistakes

Posted on Wednesday, September 15, 2010 at 1:39 PM

Why do some thrive, while others fail?

By William Dunkerley

It's no secret that a lot of print publications are suffering. Advertising is down. Subscriptions are down. The only thing that's up is the number of casualties. Some major publications have already shut down, along with a host of smaller ones.

Many publications, however, are transitioning from print to online as a means of cutting costs. After all, with revenues down, it would seem to make good sense to reduce costs wherever possible. Switching to an online presentation can almost instantly cut out a big chunk of expense: paper, printing, distribution.

For most publications that have been print-only, developing an effective online strategy is long overdue. Today's readers have different expectations for how news and information should be provided to them. The print-only model for many is a relic of yesteryear.

That doesn't mean that there's no role for print in the mix. There are still a lot of things that can be provided with greater utility in print than online. But the idea of all print all the time has little relevance today.

That said, many distressed print publications are making transitions to online that are ill advised.

Coping with a recessionary period has always put a strain on publishers. Usually, when companies that use media advertising start feeling the pinch, advertising budgets are among the first to be cut. As a result, publishers are among the first to feel the pains of recession.

My consulting firm has worked with publishers through quite a number of recessionary periods. As a result, we've been able to observe some general patterns that seem to repeat themselves each time. We've seen publishers that are able to withstand tough economic times with only a minimal amount of sacrifice. For some, business even improves. Others, however, have their very existence threatened.

What's the difference? Why do some thrive, while others fail? My own observation is that the publishing companies that ran into the most trouble were operating with troubled business strategies in the first place. When times were good, they were able to coast along and even turn a profit. But when the going got tough, they didn't have the inherent strength to keep going.

That process reminds me of awhile back when my car was overdue for a tune-up. When I cruised along on a flat stretch of road, it ran with no apparent problems. But, if I drove up a steep hill, the engine would start to sputter and cough, and the car had trouble making it up the hill.

In past recessions, when publishing companies in need of a strategic tune-up began having trouble making ends meet, many realized something was amiss. That led them to address the primary dysfunction that existed in their business plans and strategies. As a result, many were able to pull through the recession and emerge even stronger.

The problem today is that instead of having that epiphany and subsequent adoption of new business strategies, the publishers are merely opting to cut out the major print-related expenses and go online. That's a mistake.

It's true that they begin saving money. But in the end they're not saving their publications. That's because they haven't routed out and changed the old dysfunctional business concepts that led them to the trouble they're in. What many publishers are doing is simply taking their print-style content, along with their old business models, and moving them online.

They're buying some time with this move. But they haven't fixed the underlying problems. In effect, they're masking the symptoms rather than addressing the cause.

Solid, sustainable results from publishing operations are best achieved by using a sound, synergistic business model. An economic downturn is a wonderful time to fix longstanding flaws in your business model. Doing so will help you survive the tough period. And it will also put you in a much stronger position for attaining even greater levels of success when economic conditions rebound.

William Dunkerley is publisher of STRAT and principal of William Dunkerley Publishing Consultants.

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Posted in Print (RSS)

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