The False Allure of Going All Digital
Posted on Wednesday, October 30, 2013 at 12:33 AM
Take stock of where the bulk of our industry's revenues are still
coming from.
By William Dunkerley
A call came
in from the publisher of a monthly in an agricultural field. He was
looking for advice on switching from print to all digital. A lot of
publishers seem to have a similar interest. They say print revenues
never recovered from the recession. They've operated at a loss and can't
keep it up. They're looking for drastic cuts in expenses to bring them
out of the red. Cutting out the cost of print production seems like an
obvious choice.
I sent this publisher a copy of last month's
article, "Growing Your Digital Audience." I advised him to be very
cautious about cutting out print. We're now addressing this issue again
for the purpose of giving emphasis to some very important related
concerns.
The idea of going all digital can be very seductive --
especially for a publication that has fallen into debt. Digital
publishing is widely regarded as the future of publishing, and a bright
future at that. So taking a giant leap into the future and solving
daunting financial problems at the same time sounds great. Even many
advertisers are clamoring for good digital advertising opportunities.
We
turned to Google Trends to compare the interest in print vs. digital
advertising. Figure 1 illustrates the comparative interest from 2004 to
the present. It shows much greater interest in digital than print.
Interest in both forms of advertising is on a generally downward slope,
however.
Figure 1: Interest in digital advertising far exceeds that with
print. The graph exemplifies this in relative terms. (Source: Google
Trends)
Interest and excitement over digital publishing isn't
the whole story, though. Unquestionably, digital publishing is growing
by leaps and bounds. Nonetheless, on average, it is still a relatively
small part of the revenue pie for magazine publishers. Figure 2 shows
the 2012 revenue sources for magazine publishers who have extended
themselves into digital. A projection for the year 2016 is shown for
comparison.
Figure 2: For most print publishers, digital revenues are still a
very small part of the revenue pie. By 2016 digital is expected to
double. But that still leaves it well below print circulation and
advertising in size. (Source: Veronis Suhler Stevenson
Communications Industry Forecast, 26th edition)
What does
this mean to you? It suggests that if you are a print publisher who's
not yet entered the digital competition, you may be able to grow new
digital ventures to the extent that they would represent about 7 percent
of your total revenue. By 2016 that number could grow to 14 percent.
That
means that going into digital is certainly worth doing without delay.
The pie charts also stand as a point of comparison for publishers who
already have digital extensions of their brands. If you're not getting 7
percent of your revenues from digital, you should set your sights higher
and perhaps reformulate your digital plans.
But where does all
this leave the agricultural publisher who called looking for advice? And
what about other publishers who are looking to digital to save their
flagging publications?
The answer is to enhance the productivity
of what you are doing in print.
The Great Recession came as a big
shock to a lot of publishers. They believed that they were running a
successful magazine. They even had profits to prove that. But now it is
important to ask whether they were operating with optimal effectiveness.
What was adequate in good times may not be enough now.
Sadly,
many publishing operations never were truly optimized. They were
producing profits in a good economy, but their modus operandi was not
strong enough to stand up to serious economic difficulties.
This
is a message that many publishers find difficult to accept. It can
conflict with one's sense of pride over past accomplishments. But it is
not a message meant to disparage prior achievement; instead it is a
message of hope. In my experience it is rare to find a publishing
organization that cannot make great gains from a concerted effort at
productivity enhancement coupled with the acquisition of new skills and
business strategies.
William Dunkerley is principal of William
Dunkerley Publishing Consultants, www.publishinghelp.com.
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