Time Inc. Cuts Some 500 Jobs // NY Times announces incubator for

Posted on February 5, 2013 by

["What this country needs is more unemployed politicians." - Angela Davis ]

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Time Inc. Cuts Some 500 Jobs, Biggest Layoffs in Years

Storied Publisher Resumes Reductions to Employee Rolls

By: Nat Ives

Time Inc., the publisher of magazines including Time and Sports Illustrated, has begun eliminating about 6% of its head count — nearly 500 jobs — in the biggest round of cuts at the company since 2008.

“With the significant and ongoing changes in our industry, we must continue to transform our company into one that is leaner, more nimble and more innately multi-platform,” CEO Laura Lang said in a memo to employees today. “To make this change, we need to operate as smartly and efficiently as possible to create room for critical investments and new initiatives. These reductions are part of this important transformation process. ”

Meetings with affected employees began Wednesday morning and were expected to continue throughout the day.

Staffers had been enjoying a bit of a respite from the regular layoffs under former Chairman-CEO Ann Moore, who eliminated thousands of jobs through cuts and magazines sales in the 2000s. But they also expected a large swing of the axe sooner or later under Ms. Lang, a publishing novice who joined from Digitas in January 2011. One of her first moves was to call a top-to-bottom review facilitated by consultants from Bain & Co., evaluating priorities, opportunities and trouble spots.

Time Inc. counted as many as 12,000 employees as recently as 2007, but was down to 8,000 before today’s cuts.

Time Inc. is not alone in reducing head count, but the scope of today’s action is broader than others. Meredith Corp., the publisher of magazines such as Ladies’ Home Journal and Family Circle, laid off about 60 employees on Jan. 18, less than 2% of its roughly 3,400 employees.

Time Inc. revenue over the first nine months of the year totaled nearly $2.5 billion, down 6.2% from the equivalent period in 2011 more than 26% below the first nine months of 2008. Time Warner plans to report its financial results for the fourth quarter and 2012 as a whole on Feb. 6.
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The NY Times announces timeSpace: a 4 month incubator for early stage media startups

BY Harrison Weber

The New York Times has just announced timeSpace: a four month incubator which invites early stage media startups into the company’s headquarters. The program will bring in three to five startups to connect with NY Times staff, demo their product, and “teach/learn alongside entrepreneurs and employees who make their livings in digital media, technology and journalism.”

The timeSpace program does not require businesses to give up any equity, and appears to be a result of the shifting media landscape – an area which is quite complicated at the moment, especially in terms of monetization and the migration of readers from print to digital.

The NY Times details that it is “in the midst of unprecedented change:”

Our core purpose remains to enhance society by creating, collecting and distributing high-quality news and information. We want to push ourselves and push others to find the best ways to do so, and we believe that timeSpace can be a part of that process.

Judging from the statement above, this program will be mutually beneficial. The NY Times needs fresh ideas and innovative thinkers, while emerging companies can benefit from the expertise and reach of the prestigious media company.

It’s worth noting that this isn’t the first time a media giant has sought to work with early stage companies. Last year, the BBC launched a mentoring scheme, and initiatives like Matter Ventures and Turner Broadcasting’s Media Camp also fit into this category.

If you run an early stage media company and your interest is piqued, you’ll need to turn your application in by 5pm on February 19th. Learn more via the link below. TimeSpace

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After Scientology Debacle, The Atlantic Tightens Guidelines

Posted on February 5, 2013 by

["All media exist to invest our lives with artificial perceptions and arbitrary values." - Marshall McLuhan ]

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Moving from ‘Magazines’ to ‘Media’MagRadar rebrands and discovers more about multiplatform in the process. BY BILL MICKEY Share on facebook Share on google_follow Share on twitter Share on linkedin Share on blogger Share on tumblr Share on email Share on print More Sharing Services

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Any company that’s grown up targeting the magazine business the past few decades has no doubt had to come to terms with the new media landscape, particularly if its name is directly tied to print media.

Heck, we’re mulling through this now with FOLIO:, which is still “The Magazine for Magazine Management.” The main associations that serve the industry have already rebranded, as did ABC recently. MagazineRadar, a data service that has helped magazine publishers know more about brands and the people that buy them, got caught in the same dilemma. It’s just rebranded itself as MediaRadar. Not a particularly big stretch, but it’s definitely symbolic of the changes happening all around us. As an example, the company has been tracking just over one million brands that are buying online ads and in the process of doing so has uncovered some interesting patterns in how those digital buys overlap, or don’t overlap, print. “The number-one discovery was the size of the online ad market is much larger than we understood,” says co-founder Todd Krizelman. “If we just
look on the consumer side of MPA titles, out of the people who buy MPA magazines, only a third of those are showing up on [the brand's] website. We’re 20 years into the web and only one-third are buying on the same set of websites.” Surprisingly, there appears to be very little overlap, or integrated sales, going on. In the third quarter of 2012, for example, MediaRadar found that about 9,000 brands advertised in the MPA-member consumer magazines it tracks. There were 12,000 brands that advertised on those titles’ websites. But only 3,000 were integrated buys-leaving about 9,000 advertisers that were only buying digital with those brands. There are some brands that have done particularly well through integrated buys, but that discrepancy is one reason digital-only publishers have done as well as they have, says Krizelman. “One of the reasons they’ve been successful is not that they’ve stolen clients, but exploited the knowledge that there’s thousands of advertisers that buy only onl
ine.”
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After Scientology Debacle, The Atlantic Tightens Native Ad Guidelines Sponsoredcontent will become more prominent on the site

By Lucia Moses

A little over two weeks after The Atlantic got egg on its face over a sponsored Web post by the Church of Scientology, the media brand has issued new guidelines for so-called native advertising. They’re live on the brand’s site now.

The issue-according to the outraged digerati but also by the Atlantic’s own admission-was that the Atlantic violated the spirit of native advertising by giving a platform to a controversial institution that didn’t jibe with its intellectual tradition. Then it made things worse by censoring some of the negative reaction that filled up the comments stream. The incident generated a ton of screaming in social media, while also yielding an instant classic spoof by The Onion.

“We failed,” said Scott Havens, president of the Atlantic. “We published content that we didn’t work with our advertiser on. It was largely a press release. The comment stream exploded, and to control it, the staffer was holding back on publishing the negative ones.”

Going forward, native ads will be subject to three main changes. First, native ads will go through a two-part review process by a team consisting of Havens himself as well as people from sales, marketing, PR, legal and product. The team will screen prospective advertisers and review their content before it runs to make sure it doesn’t run afoul of the Atlantic’s brand.

Second, the labeling will be more overt, with a more prominent “sponsored content” label and clearly visible disclaimer (which until now, viewers had to click to read).

Finally, the Atlantic will have the sole power to moderate comments and will only moderate comments for spam, obscenity, hate speech and the like.

The native ad (or sponsor content, as the Atlantic calls it) guidelines are part of a 1,000-word advertising policy that the brand created and that apply to all its ads. For now, the standards only apply to the Atlantic, but Havens said he expected that the company’s other brands would likely adopt them.

Not only has native become a key driver of the Atlantic’s business, but it’s fundamental to Quartz, Atlantic Media’s new business brand. As traditional publishers aggressively try to mine advertising gold in native content, the Atlantic brouhaha goes to show the growing pains that go along with bending ad models. It remains to be seen as to whether the additional hoops the company will now require brands and its staff to jump through to execute native ads will crimp their growth.

However, the Atlantic can take credit for being ahead of others in creating standards for native ads and making them publicly available, but with being a first mover comes scrutiny, and there will likely be those who will wish the Atlantic went further and, say, denounced the Church of Scientology or assigned someone from the editorial side to review native advertising.

Deciding where to set the bar when it comes to accepting advertising is a slippery slope (many publishers won’t take advertising by products that make unsubstantiated medical claims, yet accept money from other advertisers that are seen as objectionable, like tobacco and oil companies). Media companies like the Atlantic need advertising to continue producing their high-quality journalism, so it’s not surprising that Havens didn’t rule out working with Scientology in the future (both sides are still working out what to do with the aborted native ad.) “There’s no way we can account for all kinds of situations that come our way,” he said.

As far as editorial’s role, he takes the view that they shouldn’t be involved in advertising matters, although the Atlantic’s editorial leadership did participate in crafting the new ad guidelines. “We do believe there is some importance in keeping the advertising side of the business away from editorial,” Havens said.

And the more prominent labeling likely will go too far for some advertisers but not enough for traditionalists.

That’s where native advertising runs a fine line. You don’t want to fool the reader, but on the other hand, if it’s not mimicking editorial, it’s missing the point. After all, the reason brands like native ad treatments is that they look and feel iike a site’s typical content, and theoretically have less chance of being completely ignored. “It doesn’t serve our advertisers if there are questions of whether this is advertising or editorial,” Havens said, but added: “We don’t want to put a neon sign on this.”

This exercise surely won’t be the last of its kind, as other publishers navigate the uncertainty that comes with embracing an evolving and growing ad medium. Native advertising represented more than a third of its advertising revenue last year, and is growing. “We’re very bullish,” Havens said. “We believe it will be the most important part of our digital advertising.”

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A Peek Into a Wholesaler Warehouse,// Measure Twice. Then Cut, Paste,

Posted on February 5, 2013 by

["Trade isn't about goods. Trade is about information. Goods sit in the warehouse until information moves them." - C. J. Cherryh ]

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A Peek Into a Wholesaler Warehouse, Part Two

A merchandising visit to a nearby WalMart superstore shows, soup to nuts, what a Source Interlink merchandiser does on a typical day.

BY Linda Ruth

“Our job is to make sure that what is supposed to happen in the store is what does happen,” said Don Petras, director of Field Service for Source Interlink

That is the reason why every single one of the 4,000 merchandisers in Source Interlink’s employ (expanded to 11,000 thanks to a recent partnership with Retail Marketing Professionals) has a store-specific binder for each location the merchandiser is expected to service once or twice a week.

For Part Two of my visit to Source Interlink, hosted by David Algire, EVP of Source Interlink Media, Petras had taken us out on a merchandising visit to a nearby WalMart superstore to show us, soup to nuts, what a Source Interlink merchandiser does on a typical day.

“We have three directors; each has about half a dozen district managers,” Petras said. “Each of those managers has about nine full time supervisors, and each of those supervisors has between 80 and 150 storefronts. The supervisors’ main role is hiring and training. Of course there tends to be turnover in merchandisers, everyone knows that. That is why our supervisors stay with each new employee till he or she really knows the job. They’ll spend three full weeks with the employee in a store like this, a Super WalMart. It’s challenging. A store like this, that takes maybe half a day to service, could take a full day at this time of year. Let me show you why.”

He took us back to the storage bay, already crammed with merchandise. “This is only going to get more crowded as we get closer to the holiday season,” he said. “We’re in all our stores within three hours of delivery to get the product checked in and on the shelves. A waste of time becomes a waste of sale.”

He brought us to the front of the store, where he showed how they roll the checkout replenishment, aisle by aisle, to minimize empty pockets. “Every empty pocket represents a sale lost; it’s something we remember when we’re restocking.”

Frustratingly, merchandisers are not permitted in the stores on the very busiest days-the day after Thanksgiving, for example. The thinking is that they get in the way of shoppers. Petras is philosophical.

“We have to make sure that the stores are at their best going into the high-volume days,” he said. “Otherwise there is nothing we can do.”

Source is testing a weekend touchup to make sure pockets are full and displays are neat. They’ve noticed an uptick in sales in the 4,000 stores in the program now, and are gradually rolling this test out to more stores.

“When we walk into a store, our goal is perfection,” he said.

See Also: A Peek Into a Wholesaler Warehouse, Part One

Linda Ruth is Principal of Publisher Single Copy Sales Services. Her book of case studies, “How to Market Your Magazine on the Newsstand,” is available at BookDojo.com and at Amazon.
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Measure Twice. Then Cut, Paste, Spindle, Fold and Mutilate

by newsstandpromos

I’ve been diving deeper and deeper into the digital subscriber waters over the past year and I can’t help but wonder if this is a little like what the newsstand distribution sea was back in the mid 1970s when mainframes and service bureaus entered the business. Their initial uses were to manage the warehouse, distribution, tie lines and reporting. An industry trade journal at the time actually listed all of the magazine wholesalers at the back of the book by the type of computer system the wholesaler had installed. Everything was possible and everyone had a different way of looking at things. The new technology was all over the place.

The thing that has really driven me to distraction with digital circulation so far is the reporting. Maybe it’s the learning curve but not much is very helpful at first until I download, copy, cut, paste and then consider the fine art of self defenestration. The later is a helpful fantasy until I realize that I work on the ground floor. At best, I’ll scare the dog and sprain a knee.

To be fair, the reports I see from Curtis Circulation, Kable Media, Comag, Source Interlink, Ingram Periodicals and the like also require massaging, cutting and a fair bit of pasting to get the data to to where I need it to go. But over the years we’ve all learned to speak the same language. We all know what we’re looking for so the basic data is just waiting to be reinterpreted.

The magazine Audience Development recently published an exellent comparison guide that lists all of the many features digital subsriber services like Zinio, Nook and iTunes offer publishers.

Most notably, only Zinio pushes reports automatically to publishers. Want to report your digital numbers on your next audit report? There is very little audit bureau support. I can vouch for that last fact as I am currently struggling with a series of spreadsheets that the Alliance for Audited Media (Sorry, I still want to use ABC) has developed for reporting purposes.

So you see, digital providers and your legion of fanboys: If you want us boring circulation, um, pardon me, Audience Development types to show real appreciation for your potential and your wildly growing coolness and inevetiability….how about some data that actually, you know, uh, means something at first glance? You know, something that I don’t have to waste half a day scrolling around to get to the one piece of information that will let me tell my client, “Hey! We’ve got a winner on our hands!” Or, sadly, “Nope, that did not work. Let’s try something different.”

We’re getting there, right?

Charts and graphs are really handy. And they are so pretty! But what I want to know (Quickly) is how many subs were served for the February issue, how many of those were new, how many renewing, and how that compares to a year ago?

Oh, and if you haven’t, please meet with the AAM folks. They are some of the nicest, most patient, extraordinarily polite and very helpful people around. Right now in fact, I can say they are my favorite people on the whole wide planet.

It’s that time of year again, you know.

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What this New York dotcom couple tells us about the future of newspapers

Posted on January 30, 2013 by

["Egotism, n: Doing the New York Times crossword puzzle with a pen." - Ambrose Bierce]

Like us on Facebook Follow us on Twitter What this New York dotcom couple tells us about the future of newspapers and magazines

JANUARY 10, 2013 BY COLIN MORRISON 1 COMMENT These are get-real times for traditional newspaper and magazine publishers. The winners will be those who recognise 5 basic truths:

1. Paying content: The wake-up starts here. A new book by US journalism professor C.W.Anderson* gets to the heart of the “journalistic hubris” that prevents life-saving change across traditional media: an attitude that sees original reporting as the only true journalism, with no tolerance for curation, aggregation, or digital outlets like blogs and social media. It is too ironic, therefore, that seemingly pampered readers have seldom paid “enough” for newspapers and magazines – and they’re not going to start now. Advertisers have been delivering the profit, and they remain much more willing to pay for consumers than are those same consumers willing to pay for content. But advertisers are also paying less for more. Just watch (or join in) the quickening growth of free (or micro-priced) magazines, newspapers, digital media – and content generated by (and with) readers and marketers.
2. Moving pictures: The bursting growth of video-streaming is creating some TV-scale media channels and will help non-broadcast operators compete for what have been watertight (and huge) TV budgets.
3. Social networks: are the best (and lowest-cost) promotional channels for all media. And good content too.
4. Digital first: There’s still money in print but publishers with ambition must turn themselves inside out to become platform-agnostic, delivering appetising digital content and functionality. Stand by for the mobile tsunami in content, ecommerce and interactive services. That’s the next big break-out opportunity for, and threat to, traditional media – and even to existing online operators.
5. Audience insight: Newspaper and magazine brands must re-invent their traditional skills to captivate consumers and compete in an ocean of digital media and retail channels. It’s so much more than knowing what the audience wants to read.

Behind those five simple statements is the need for completely new business models with the inevitability of: reduced revenues from ‘flat’ advertising; increased costs through video, technology, and new skills; and lots of new-style, punchy competitors. That’s the price of digital competition, worlds away from cosy, neatly-separated media sectors.

However, the good news for traditional publishers is that hard copy can still thrive. The bad news is that only the strongest brands will make it – and then only with lower content costs and some vital new skills.

That is one lesson from Europe’s increasingly successful free newspapers and magazines. Many are highly profitable on revenue levels that are loss-making for their high-cost, paid-for rivals. That’s the legacy company problem.

Consider the magazine emperor Conde Nast (no slouch in the digital stakes), which finds itself squeezed in the weddings sector – by the XO Group, a $250m New York company launched in the dotcom 1990s. More than that, XO (formerly The Knot) is showing how printed magazines can be reinvented to drive the profitability of video-rich digital media.

TheKnot.com was launched in 1996, by four friends from New York University’s film school. Two of them, David Liu and CarleyTheKnot Roney, claim the business sprang from their own wedding prep. Roney says: “When I got engaged in 1993, my now-husband (and business partner) and I were excited like any other couple, but quickly realized the resources available at the time couldn’t help us. I was working 70 hours a week and no vendors were open when I finally could sit down and plan after 7 p.m. There were no etiquette tips for modern couples. I couldn’t find any ideas on how to plan a wedding for a little blonde girl marrying a 6 ft. tall Chinese guy – never mind finding a red wedding dress, since my future mother-in-law informed me that white was the Chinese colour of mourning! If that weren’t enough, we were also
planning and paying for the wedding ourselves and couldn’t find any tips on how to even start.”

Liu and Roney somehow managed to get married (“a proper fun disaster”) and then set out to reinvent the way couples plan their weddings – and they took the market by storm.

TheKnot.com quickly became the country’s most popular (by far) online wedding site and is now flagship brand of a media business that profitably spans video streaming, ecommerce, national and regional magazines, custom publishing, books, broadcasting, events, and is all over social media. Today TheKnot.com and its ecommerce gift registry site WeddingChannel.com reach nearly 2million US brides annually. America’s leading wedding-planning resource has been joined by TheNest.com and TheBump.com for young couples and first-time parents, and now TheBlush.com on beauty, health and fashion. And Carley Roney is the company’s glamorous public face on chat shows all over the country.

Liu gushes enthusiasm for the life and times of his amazing company: “Media is now a platform of services. Prior to The Knot, and specifically prior to the internet, there really was no single destination where you could plan your entire wedding, find your caterers, photographers, musicians, browse locations, find out what the marriage license requirements are in your local area, register for gifts, book a honeymoon, find the wedding gown. All of these things were multiple, individual tasks that had to be done in very separate places. Our mission with The Knot was to create a single destination for a bride and groom who are really pressed for time, thereby make the planning process that much easier.”

XO Group floated in 1999 and survived the dotcom bust. It now has annual turnover of $130m, operating profit margins of 15% and 700 employees.Liu as CEO and Roney asTheKnotNetwork Chief Content Officer have succeeded because they made their online service a fun, hip, user-generated, tech-strong resource in what had been a dusty, tired magazine sector. They describe XO as the country’s “leading media and technology company devoted to weddings, pregnancy and everything in between”.

Its annual Bridal Fashion Week is video-streamed across the US with huge audiences, advertising and sponsorship. In reality, the company envelopes its target audience in a way that is reminiscent of the very best B2B media groups which span information, exhibitions, consultancy, and conferences. But XO is more significant than that. At a time when consumer publishers across the world are desperately trying to find ways of returning their magazine and newspaper franchises to long-term profit, here is an established digital-first business also making the most of hard copy. Liu says that, even when they launched TheKnot.com on the then so-powerful AOL, he and his film-mad colleagues were always planning to publish magazines as part of their wedding ‘network’.

He told Flashes & Flames: “I think there is something uniquely tactile and luxurious about looking through a magazine. It has the ability to please the consumer in ways that digital can’t. We realised very early on that magazines were an essential opportunity to TheBump extend the brands we were building. But we look at publishing through fresh eyes. Part of the problem of legacy publishers is that that they have bad practices that don’t make sense anymore. Like, here in the US, where they almost give the magazines away for very low subscription prices or with pricy gifts so they can guarantee a rate base and chase the advertising dollars. They have been making a terrible mistake in commoditising advertising and it has been bad for the published product. Instead, we are winning in the wedding market because the
competition tries to sell them a ‘flat’ advertisement in a magazine and we are selling a wide range of services both to readers and marketers.”

Liu says his pioneering ecommerce operations, which contribute some 25% of total revenues, are highly profitable but also important to the company’s advertising sales story because “they show clients we are in the same boat and are results driven – which is a whole different story from the traditional way that magazine publishers hype the circulation and then try and get as many dollars as possible for advertising without worrying what impact the ads will have and what sales they generate.”

The XO boss believes his company’s genesis in the wild west world of movie production helped ensure its entrepreneurial flair and can-do approach to media. And now, he’s full of advice for the traditional publishers he has spent the last decade attacking:

* “Hard copy, done well still works when it is executed in a way that is exciting and valuable to the consumer. look at The Economist.”
* “Digital technologies have made the consumer king. Publishers still haven’t really grasped that technology wrings out the inefficiencies in the system and exposes poor service.”
* “Traditional media always had room for a No.1 and a No.2 product. Technology has a tendency to create monopolies. It’s winner takes all with a big gap between No.1 and No.2. So things are going to get tougher for many companies.”
* “Video-streaming will be transformative for the whole media industry. Live programming is the way to retain value. If you look at TV, everything else has deteriorated but live sports has remained strong and profitable.”
* “Consumers will, if anything, need more help in finding their way round the internet as consumer choice explodes. So there will be a premium placed on strong, trusted media brands, whether Vogue, the BBC, Cosmopolitan, Harpers or The Economist.”

David Liu warms to his theme: “The whole debate about pay walls is misplaced. What was a consumer paying for in the first place when you think about traditional media? Was it really “the media” they were buying? Or were they paying for companies to put it in a newspaper, load it on a truck and deliver it? People were largely paying for the manufacturing and “productizing” of the content. That’s no longer there anymore with online. The consumer isn’t going to give you fat margins anymore just because they want the content.”

But Liu knows that there are systemic challenges ahead for his business too. He sees the coming explosion of mobile as a hugely disruptive ‘third wave’ that will “make existing media look quaint, whether in digital or hard copy. Mobile will be the chance also for the best traditional media companies to get back in charge because the sheer interactivity and levels of functionality available (much of which we have not yet seen) will disrupt a lot of digital natives as well as the immigrants.

He adds: “That is where the big brands can capitalise on their reputations – but they will have to change the way they do business. For publishers, that means an end to regarding digital operations as something on the side of a magazine or newspaper and run by the IT department. You have to build a modern media business round the wants and needs of consumers, and use the technology and functionality to satisfy them creatively.”

Like the new-wave digital companies facing attack from yet-newer mobile operators, The Knot is busy swatting competitors from

dreamwedding blogs, regional websites, and online scrapbook Pinterest. But Liu and Roney keep moving. Their newest whiz is the video-streamed “Dream Wedding” where viewers are voting Xfactor-like for a couple they want to see married, and then for all the details of the wedding. Last week, they announced that an LA couple had been selected to be married in New York on Valentine’s Day. Next week, voters will decide on the rings, bridal dresses, the cake and even the bride’s make-up and hairstyling. It’s gripping stuff for hundreds of thousands of people and is firing up The Knot’s ecommerce, advertising and sponsorship revenues.

It’s just the latest innovation from the company that is all over what is the world’s second biggest wedding market. But The Knot is also chasing the biggest with its fast-growing 2011 launch into China. And they have a newly licensed business in Australia. XO looks a bit like a 21st century version of the businesses in the US (American Baby) and UK and Australia (Bounty) which once developed imaginative, database ways to dominate the thinking, planning and buying by pregnant women as they moved through pregnancy and childbirth. And, whether or not XO manages to grow profits from childcare and first-homes as successfully as they have with weddings, this really does look like the way to develop platform-agnostic media in an era of channel convergence.

Why wouldn’t this ‘wrap-round media’ model work in fashion, health, food, sports, and almost everywhere else? And wouldn’t it work just as well within the vertical sections of mass market newspapers and magazines as in specialist, magazine-centric media?

Liu says: “We’re really building the blueprint for a media company of the 21st century.”

TheNest That ‘platform-agnostic’ blueprint means having strong teams continually developing research and insights into audience behaviour, and smart technologists to devise solutions. As Liu says, it’s the opposite of a magazine or newspaper editor coming up with an idea at the water cooler for a new web site or ipad edition, something ancillary. “It’s all about being absorbed and immersed in your readers lives, not hitting and running.”

David Liu and Carley Roney are not alone in demonstrating the power and profitability of “media neutrality” and deep-down specialisation. But XO Group is a fine demonstration of how new and old media can be fused to create strong, modern multi-media brands. It also, though, underlines the scale of challenge for legacy publishers.

At the very least, traditional companies must fundamentally change their organisations, in much the way that Professor C.W.Anderson is suggesting for daily newspapers*. The business model must address seismic changes in reader values and advertiser appetites. But there’s more. The editor can no longer be the king or queen of an ambitious media brand. No more devils in Prada. The content team must share parity, power and funding with strong teams devoted to ‘audience insight’ and digital development. Liu says almost one-third of XO Group’s employees are “technical”. How’s that for a different kind of media company?

Flattening the publishing company hierarchy may, indeed, be the key to ensuring that a magazine or newspaper (whether digital or hard copy) can become a versatile media channel for the future. Otherwise, the traditional hard copy brand may not survive at all, let alone help to revive a threatened business. There’s a lot of kicking and screaming to come.

* “Rebuilding the News: Metropolitan Journalism in the Digital Age” by C.W.Anderson (Temple University Press, 2012).

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Is It The Year Of The ‘Print Cliff’? // New Republic, Old Pay Wall

Posted on January 30, 2013 by

["Living at risk is jumping off the cliff and building your wings on the way down." - Ray Bradbury]

View my videos on YouTube Follow me on Twitter Like me on Facebook Social Shopper: Is It The Year Of The ‘Print Cliff’? by Sarah Mahoney

Chalk it up to one of those industry incongruities: While newspapers have lost something like 30% of readers in the last 20 years, the free-standing inserts that fatten them up are still gaining weight. (Kantar reports that last year, FSI coupon activity gained 0.8%, with CPG coupons up 2.4%.)

John Andrews, CEO and founder of Collective Bias, a Bentonville, Ark.-based social shopper marketing company, tells Marketing Daily what’s afoot in shopper marketing, and why he thinks it all is about to change.

Q: So shopper marketing is odd. Much of it pours into print, and, while for years people have predicted a bigger shift to digital, it hasn’t really happened. Yet, you think this is the year. Want to explain?

A: Sure, I call it the “print cliff,” and this is the year. There is something like $10 billion spent on FSIs each year, and another $4 billion or so in-store circulars — $15 billion can’t be wrong. Brands need to get information about new products and promotions and coupons out there. And they know purchasing FSIs are inefficient. As soon as those dollars can find a good situation, and if they can accomplish the same goals, they are going to flow in that direction. And yes, I think this is the year that this economic reality will hit advertisers. Up until now, they haven’t seen a scalable option. And of course, they want to know how to measure ROI. Advertisers want to be where consumers are, and that’s not newspapers. The eyeballs just aren’t there.

Q: And your company is an alternative?

A: Yes, companies like this one. It’s its own kind of shopper marketing. We are targeting the same trade dollars going into FSIs. The rise of social platforms created a huge need for media that wasn’t there. When I worked in emerging media for Walmart, we started looking at blogs that talked about Walmart’s core brand promise of saving money, and put that together as the ElevenMoms program, which has now been rebranded as WalmartMoms. And at Collective Bias, we sell media designed to travel across social channels, whether it’s YouTube, Pinterest, Instagram, whatever — anything that’s along the consumer’s path to purchase. We have a community of something like
1,400 influencers, with an average of 40,000 followers. Our average campaign will generate between 8 and 12 million in measured reach, and of course, we’re tracking overall share of voice.

Q: So what makes social content a better way to connect?

A: Take Duane Reade, a client of ours, as an example. One of our members may choose to participate in a campaign for a new fresh food it’s selling. And that influencer will get paid, usually between $200 and $500, for creating something his or her audience wants. So they create content that has some value to the user, maybe it’s a recipe or a how-to video or a photo montage. If I’m an advertiser, I don’t really want an interruption-style advertising message, which is just some old ad model put on new technology. The quality of the content has to be compelling in order to get consumed.

Q: You don’t think that makes consumers leery? After all, aren’t many trying to research brands without bias?

A: Our influencers have curated an audience, and if they break the trust of that audience, and provide something that is not valuable, they won’t keep the reader. We are careful to make sure it is disclosed, so in effect it becomes known as a piece of advertorial content, and something I may choose to engage with. It’s something I might find valuable.

Read more: __________
New Republic, Old Pay Wall

By Peter Kafka Information wants to be free, but Chris Hughes wants to get paid. So how will the new owner of the New Republic handle that balancing act?

The same way lots of other online publications are handling the balancing act: A freemium/pay wall model.

Hughes’ publication, which relaunched yesterday with aredesigned website , iPad app and print magazine, will also use a new pay wall, which will allow nonsubscribers to read up to eight online articles per month, per device. That is: You could read eight articles on your MacBook, and another eight on your Kindle, etc.

Hughes doesn’t reference the pay wall in his letter introducing his redesign, and there doesn’t seem to be any direct reference to it anywhere else on the site. But a registration page does note that paying subscribers will get “unlimited online access;” a rep for Hughes confirmed the pay wall this morning.

“Free up to a point” is an increasingly common strategy for online publications: The New York Times, for instance, launched its pay wall in the spring of 2011 , but allowed nonsubscribers to read up to 20 stories a month; a year later, it made the wall harder to jump by lowering the limit to 10 stories a month .

And our News Corp. colleagues at The Wall Street Journal have had a much stricter pay wall in place for years, and only allow nonsubscribers to read a handful of stories. (ButAllThingsD is 110 percent free, free, free! No plans to change that, as far as I know.)

Hughes, who got his start and made his fortune when he helped Harvard classmate Mark Zuckerberg build Facebook, looks like he wants to position the New Republic as a not-super-exclusive club. In addition to the print and iPad magazine, subscribers will also get access to other goodies, like live events.

Will that pitch, plus a dollop of advertising, be enough to ensure that the 98-year-old publication turns a profit? We’ll ask Hughes himself at our own live event next month: You can see him at our D: Dive Into Media conference Feb. 11-12 in Laguna Niguel, Calif.

That one isn’t free, but it is going to be an excellent show, says this very conflicted reporter. Head here if you want to join us.

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Sportswriters Go Long Online As The Business of Print Publishing

Posted on January 30, 2013 by

["In theory there is no difference between theory and practice. In practice there is." - Yogi Berra]

Like us on Facebook Follow us on Twitter Sportswriters Go Long Online

As the business of print publishing takes a hit, sports journalists find new outlets on the Web for rambling reads

By Emma Bazilian As any literary-minded technophile will tell you, the Internet has become a haven for lengthy, high-quality prose, with sites from the Awl to BuzzFeed regularly churning out 4,000-word stories. But it’s not just rambling book reviews and art-world treatises. The art of longform sportswriting has also found new life on the Web.

This sportswriting renaissance includes relative newcomers like Bill Simmons’ Grantland, sports blog network SB Nation and Deadspin (Manti Te’o, anyone?) and established players like USA Today (a backer of Sports on Earth) and Sports Illustrated, which has been pulling archived stories for its tablet editions.

“A number of sports entities are seeing that the future of sports journalism lays in longform, as people become more accustomed to reading on phones and tablets,” said Glenn Stout, who has edited The Best American Sports Writing book series since its inception in 1991 and also oversees SB Nation’s new longform section.

While Stout once relied on newspapers to fill The Best American Sports Writing volumes, he is increasingly pulling articles from digital-only outlets. Notwithstanding recent high-profile sports pieces by The New York Times and The Atlantic, Stout said print outlets are finding it harder to do these big stories.

“Twenty or 25 years ago, there were 50 or 60 of these Sunday newspaper supplements nationwide, and they were a great source [for longform sportswriting],” he said. “Those don’t exist anymore.”

Similar thinking inspired sports startup The Classical . Its dozen founders, including writers like Bethlehem Shoals and Tim Marchman, pitched the idea on Kickstarter, promising “just brainy sports journalism, every day.” In less than two months, they raised more than $55,000. Now, the site’s offbeat sports stories (titles “Rabbit Remembered ” and “A Portrait of Kenny as a Young Hooper ” belie their authors’ literary backgrounds) are getting picked up by the likes of Deadspin and Salon.

“In the past, if I had written the kind of stuff I’ve written for The Classical, no magazine would be able to run it,” said one of the site’s co-founders, Pete Beatty, who also works as a book editor.

“It costs us the same amount [of money] to run 3,000 or 300 words,” said co-founder David Roth, who writes for The Wall Street Journal’s blog The Daily Fix. “We have some freedom in that regard that the Journal doesn’t although they do have a lot of advantages over us-like an office, for starters.”

The Classical also doesn’t have the funds to pay writers although its founders hope that will change in the coming year; the site is in talks with 29th Street Publishing to sell content in the form of iPad magazines.

For now, the exposure is enough for longform proponents like Stout. “There might not be a whole lot of money in it yet,” he said. “But you can not only find a place to show your work-you can find an audience for it.”

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Just Read It: Magazine Publishers Push Minimalist Apps Without Fluff

Posted on January 30, 2013 by

["I still find each day too short for all the thoughts I want to think, all the walks I want to take, all the books I want to read, and all the friends I want to see." - John Burroughs]

Like us on Facebook Just Read It: Magazine Publishers Push Minimalist Apps Without Fluff

by Susan Currie Sivek “Internet Users Demand Less Interactivity,” read the headline of a recent article at The Onion. A (fictional) Internet user commented:

“Every time I type a web address into my browser, I don’t need to be taken to a fully immersive, cross-platform, interactive viewing experience…I don’t want to take a moment to provide my feedback, open a free account, become part of a growing online community, or see what related links are available at various content partners.”

Are magazine app users starting to feel the same way? Faced with floods of online content, readers open magazine apps for a cohesive, relaxed reading experience — only to cope with massive file downloads and confusing, complex interfaces.

A new batch of magazine publishers wants to move in a different direction. Drawing on the concept of “subcompact publishing,” recently articulated by Craig Mod, and often mentioning Marco Arment’s The Magazine as inspiration, these publishers are creating minimalist magazine apps that do just enough — and no more — to provide a focused, deep, quality reading experience.

While much discussion of this approach has focused on design, there’s also a thoughtful vision underlying these publishers’ work — a dream of returning to deep reading at a relaxed pace, in an easily accessed format, with a strengthened relationship between readers and publishers. At the same time, these publishers are creating an opportunity for a wide range of content creators to better monetize their work.

29TH STREET PUBLISHING

Years of experience in working with blogging and online publishing led 29th Street Publishing co-founders David Jacobs and Natalie Podrazik to believe there had to be a better way for readers to enjoy digital text.

“With a lot of apps, you open the app, and you end up in a store. It’s ‘I just downloaded something, now I need my iTunes ID, now I need a magazine ID.’ It’s an extremely long funnel of stuff between you and reading,” Jacobs said. “We would prefer for every decision to be obvious. When you have a magazine you carry in your pocket, there’s never a question of how you’re going to read it. You’re going to open it and turn the pages … The gap between an app and printed matter is so wide.”

While many readers use apps that save online stories to read later in a text-focused format, publishers then don’t profit from the content. Today, ironically, “in order to create a better experience for reading, we have to divorce the publisher from how they make money,” Jacobs said. “We’re all in the industry, but no one would make it that way. It’s become this way incrementally over time.”

In addition to bringing accessible, minimalist design to magazine apps, Jacobs also sees the potential for content creators to ensure that their biggest fans can receive, enjoy, and support their work.

The Awl’s Weekend Companion.

The app Jacobs’ company created for the website The Awl demonstrates one solution. Jacobs is a fan of The Awl, but, as a reader, he finds it difficult to identify and keep up with the best articles from the website. The site’s magazine-style app, The Awl’s Weekend Companion , pulls together a small selection of the site’s best content of the week in a tidy, text-focused format, delivered weekly to Apple’s Newsstand on iOS. Subscriptions are $4 a month. Though the stories were previously available for free on the website, the fee both provides subscribers a neat digest of stories and helps the site make some additional money.

Jacobs sees this style of magazine app as renewing the bond between audiences and publishers — what he calls “the centuries-old social contract between magazine publishers and readers” in which readers trade time spent reading a publication for information: “If you give me your attention every month, we’ll keep you up to date.”

Blogs also offer immediate and up-to-date content, but for most readers, keeping up with the flow of content is impossible, so they only read superficially or irregularly. But “once people subscribe [to one of these magazine apps], they’re in for it every Friday,” Jacobs said. “Hopefully, it’s behavior-changing, and it helps people read articles more critically, and helps people relax more.”

Maura Magazine

One of 29th Street’s publishers, Maura Johnston, has created Maura Magazine to distribute articles she and a select group of other authors have written. A longtime journalist who’s written for print and online media, Johnston had seen good writing get “lost in the shuffle online,” and too much bad writing put out as “packing material.”

“The economics of online content dictate putting lots of stories out there — throwing them at the wall and seeing what sticks. That results in a lot of content that should sit for a bit, or shouldn’t go up,” she said. In her magazine app, which includes a small selection of stories in each issue, Johnston “can give considered edits to things, and go back and forth with writers … It’s giving people a package of multiple stories they can read at their leisure.”

Maura Magazine and The Awl’s Weekend Companion ask readers to subscribe.

THE PERIODICAL CO.

With a similar vision in mind, The Periodical Co. will launch around early February. A diverse selection of content creators are using their platform to develop minimalist magazine app experiences. One of the company’s three co-founders, David Mancherje, says that the concept appeals to both traditional and new publishers.

“We’ve heard from a lot of magazine and newspaper people who want to transfer what they’re doing and simplify the process, but also thought leaders, people who blog and tweet and want to take their writing and monetize it,” Mancherje said. “We’re building a platform for people who people just want to share their thoughts.”

Shahruz Shaukat, another co-founder, compare the development of minimalist magazine publishing to the development of blogging. “With blogging, everybody suddenly had a voice,” he said. Today, he could make his own magazine easily, even (hypothetically) by simply working with a few friends “to write a response to ‘Breaking Bad’ and publish that every week.”

Though digital magazine publishing has until recently been a fairly expensive undertaking — not to mention the technical challenges involved — these new platforms open up new opportunities for all kinds of publishers. The Periodical Co.’s third co-founder, Sean Stevens, is hopeful: “I have a feeling people will come up with more ways to use this than we’ve imagined.”

Will minimalist magazine apps also refresh readers’ interest in the digital magazine experience? The low cost of a subscription, plus readers’ desire to support their favorite publishers, might entice readers to try this new style of magazine. Maybe readers like The Onion’s frustrated Internet user will find it especially appealing.

As Johnston says, “It almost sounds like the slow food movement: people who are tired of being baited into reading negative pieces, or things that will make them angry for a minute, and then they move on …There’s a trust between me and the reader. I know you have limited time, and I want to give you three or four really good pieces that you can chew on.”

Susan Currie Sivek, Ph.D., is an assistant professor in the Department of Mass Communication at Linfield College. Her research focuses on magazines and media communities. She also blogs at sivekmedia.com , and is the magazine correspondent for MediaShift.

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Print Magazines Are NOT Going the Way Vinyl Went… and That’s Why.

Posted on January 29, 2013 by

["The four building blocks of the universe are fire, water, gravel and vinyl." - Dave Barry ]

Like me on Facebook View my videos on YouTube Follow me on Twitter Print Magazines Are NOT Going the Way Vinyl Went… and That’s Why. by Samir Husni

Comparing magazines with music is like comparing a kite to the wind that carries it across the sky. The kite is tangible, and watching it brings its own kind of joy to the experience; the wind is gossamer with no visual substance, yet as real an experience as your hair lifted off your neck on a hot day.

It doesn’t matter to you how you receive that breeze when your skin is hot and sticky. It can be from an opened window in your kitchen, to the sun roof in your car; the end result you anticipate is the same…to cool off from that sweet breeze.

The kite floats back down to you when you’re finished running across the field with it, the diamond shape bright with spring colors and virtually alive from its race across the blue sky, plastic still popping and breathing from the exertion. It’s substantial and real…you can touch and feel its presence.

It’s the same thing with magazines and music. When people compare the two by saying something like, “Magazines are going the way of vinyl,” the observation is moot. First of all, vintage is back and trending like crazy in today’s world. And second, magazines haven’t gone anywhere, unlike vinyl records; check out your newsstands, they’re robust and healthy.

But the mootness of the observation is this: music has always been like the wind, ethereal and invisible to the eye. Your favorite song flowing out of your car radio or your iPod is an active participant in the joyful experience you are receiving, but it’s not a tactile presence that you can hold in your hand. It’s the sound of the melody romancing your ears that gives you that bliss. And to you, at that moment in time, you could care less whether you hear it from a radio, an iPod, a CD, or a twelve piece orchestra for that matter. You just want to hear your song.

But the experience of holding a printed magazine and reading from it is a very real occurrence. The pages are slick and smooth to your touch. The contents are what you selected, your choice of material. It’s an intimate and personal experience, devoid of any of the interruptions of pop-up ads or infinite internet eyes taking note of every click of your mouse. The advertising and editorial content live in harmony next to each other, complementing rather than annoying and fighting over your attention. Ads flow naturally and in a very logical and systematic way, so that skipping them seems almost sacrilegious to the experience. Music, on the other hand, is all about the tunes, the musicians, the band and not the vinyl, the tape recorder or even the iPod.

samir.mag_.music_

And while many people fall in love with the artist or group of their favorite song, and revel in a fantasy world created by some mystical connection with the singer, the odds of anyone falling in love with the editor or publisher of a magazine are pretty much slim to none; at least, not without a little one-on-one wining and dining first.

So to shackle magazines and music together in some comparison of antiquity is not only unfounded, but also ridiculous.

Vinyl records did take a backseat to other platforms, such as 8-tracks, cassette tapes, CDs and ultimately, digital apparatus, but magazines haven’t been replaced by anything. They have grown new branches, with their digital counterparts, but no one has replaced the tangible experience of holding a magazine. Not even the iPad. These accoutrements only enhance the print experience, they don’t replace them.

Digital is a new media; it’s here, it’s not going anywhere and we all enjoy its amenities. But it doesn’t replace the print experience. And it isn’t trying to. Digital isn’t killing print, publishers are. Instead of forcing the death of print down our customers’ throats, why don’t we give them what they really want and encourage both?

There was some controversy recently with Beyonce when it was reported that she may have been lip-syncing when she sang the Star Spangled Banner at the inauguration of President Obama, the real-live experience versus the virtual one, minus any imperfections.

This matters to the topic only as a reference as to how real and virtual can go hand-in-hand; how one can use the digital to enhance the physical. It’s a perfect union, really. Union being the operative word. There are times the physical, the tangible is what you want and need. Other moments, the virtual realms answer the call. But isn’t it nice to have both?

So when I hear someone say, “Magazines are going the way of vinyl,” and that they have so much in common, I have only this to say:

“I will surrender one thing to those out there who insist upon the similarities of magazines and music: they both start with the letter ‘M’.”

P.S.: The above column first appeared on CommPRO.biz website Jan. 27, 2013 .

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A New Wave of Digital Journalist // Time Inc. Braces for Layoffs

Posted on January 29, 2013 by

BoSacks Speaks Out: We can all forgive the hype in the following article. I found enough genuine meat to make it very worth while to post here tonight: Here are some tidbits that are worth considering

“Journalism is an urgent industry, that is the new current character of it.”

“New journalism is scary and can be very interesting.”

“Life happens after you hit publish.”

“Now there is more communication and more learning.”

“You are not just a reporter, not just an editor, what does it mean to bring all those skills together?”

“You build a living organism on-line as a reporter. ”

The central dilemma in journalism is that you don’t know what you don’t know.

Bob Woodward
__________A New Wave of Digital Journalist Is Showing a Profession the Way Forward

By Lewis DVorkin, Forbes Staff Newsweek’s top editors faced a different kind of danger than the Flying Wallendas. Katharine Graham, publisher of The Washington Post and owner of Newsweek, made a habit of decapitating her editors. Credit: State Archives of Florida, Steinmetz Collection.

A few weeks back I attended an affair I can’t stop thinking about. I was proud to be there, but left on the early side feeling somewhat out of place. It was a reunion of old Newsweek hands (not Tina Brown’s recent crew) to celebrate what was and is no more. I worked there in the mid-80s, when it was no longer a magazine in its heyday but still an important part of the American media scene. That night, I saw friends and journalists I hadn’t seen for years – dogged reporters who filed stories, writers who excelled at newsweekly prose and the editors (dubbed Wallendas for how hard they fell from grace) who enjoyed making all their lives miserable. In some weird way I thought about the movie, Cocoon – its pool with a “lifeforce” and the chance to hop onto a spaceship and travel to a place where you would never grow old.

Very few “star” journalists of that time and space have made the trip to the digital world. Most of those I spoke with and saw are pretty much doing what they did 20 and 30 years ago. They’re doing it for traditional media companies that haven’t changed much either, although executives at each have convinced themselves otherwise. Those no longer working romanticized about the past. The experience also reminded me of something I repeatedly told Tim Forbes three or four years ago when I was deep into my startup,True/Slant. “There’s a new wave of of talent out there that’s going to blow past traditional journalists – and they don’t even see it coming.”

We’re fortunate to have members of that new wave at FORBES. They do their jobs differently, particularly when freed from hierarchical editing systems to build their own brands and be accountable for their own success. They relate to and engage with the audience unlike a past generation of reporters who could care less what readers thought (after all, what do they know?). Using the tools of social media, they follow their colleagues as competitive beat reporters to gain insight from them. Most important, they banter with them in full public view, a far more raw, if not real, version of any “news analysis” than shows up in newsprint. Sometimes, they even ride the crest of a competitor’s scoop by filtering it through their own eyes for different audiences. They produce their own videos, photos and galleries and podcasts to extend their reach. And they trust in Google , angling stories (and a story’s headline)
to give them the best chance of reaching the world. In the video below, six people who sit in our newsroom talk about their jobs and the FORBES model of digital journalism .

The New Wave of Journalist @Forbes The New Wave of Journalist @Forbes

We’re luckier still that some real pros who have been here for years decided to commit themselves to what it takes to succeed in the era of social media. Many are curmudgeons in the best sense (I might even fit that bill) with the reporting and editing scars that the new breed desperately needs to truly be great. The new FORBES newsroom is working as it should. The native digital journalists who’ve come aboard and the ink-stained wretches who stayed on during our transformation are training each other.

Collaboration like this is vital to the future of a great profession. One new book, Rebuilding the News by C.W. Anderson, and a recent report published by Columbia University, Post Industrial Journalism , talk specifically about the newspaper industry’s inability to think more expansively about how news should be reported in today’s world of social media. “The kind of work that constituted ‘original reporting’ seemed increasingly difficult for journalists to define,” writes Anderson in an except in the Nieman Journalism Lab . “Reporting existed side by side with other forms of newswork such as blogging and aggregation, often within news organizations that
heaped rhetorical scorn on these so-called lesser practices.”

You teach me, I teach you – that’s the bridge FORBES is building to connect the values and standards of traditional media with the dynamism of the digital age. It actually began five years ago. Jonathan Miller , Ross Levinsohn and Tim Forbes each saw the future and teamed up to invest in a fresh idea, making sure to contribute their extensive old/new media experience. A few city blocks away, Mike Perlis , a traditional media journalist-turned-publisher-turned-VC, was bringing his knowledge to The Huffington Post as it disrupted an industry. Today, Mike’s the CEO of FORBES, running a business dedicated to building a sustainable model for journalism.

Newsweek is gone. It was stuck in a nostalgic fog that will soon do in others. I often haul out smart sayings from others that stick with me because they hold true time and again. A dear colleague who helped me launch True/Slant used to say at all the right times, “Let the Google wash over you.” FORBES is letting the new wave of talent wash over it.

Note: Included in the video above are Steve Bertoni , Jeff Bercovici , JJ Colao and Halah Touryalai __________
Time Inc. Braces for Layoffs This Week

By Peter Kafka Here comes the news that Time Inc. employees have been dreading for months: Sources say the world’s largest magazine publisher is expected to begin a significant round of layoffs this week.

I don’t have more details about the coming cuts. But the Time Inc. employees I’ve spoken to seem to put great stock in Keith Kelly’s report from earlier this month , which predicted that up to 700 of the publisher’s 8,000 employees may go in this round.

If so, that will eclipse the company’s last big round of layoffs, in 2008 , when former CEO Ann Moore cut about 600 jobs. Those layoffs, and subsequent cost-cuts, have allowed Time Inc. to stay profitable as the magazine industry contracts.

But the top line keeps dropping : In the third quarter of last year, Time Inc generated $840 million in revenue, down from $1.1 billion in 2008. Meanwhile, parent company Time Warner has continued to evolve into a cable TV conglomerate.

New CEO Laura Lang has been on the job for a year , and has pushed her company to look for new revenue streams, including digital deals; last year, she brokered an agreement to sell iPad subscriptions via Apple’s iTunes store .

No comment from Time Inc. or parent company Time Warner.

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What Digital Magazines Can Learn From ebook Publishers

Posted on January 28, 2013 by

["Books serve to show a man that those original thoughts of his aren't very new at all." - Abraham Lincoln]

Like me on Facebook View my videos on YouTube Follow me on Twitter What digital magazines can learn from ebook publishers by Laura Hazard Owen

A recent Wall Street Journal article by Keach Hagey takes a look at trends in digital magazine pricing and finds a number of publishers charging more for tablet editions than print. As ad revenue declines, publishers are turning to digital magazines as a way to “become more leveraged toward consumer revenue and a little less dependent on advertising,” in the words of Hearst president David Carey. And here’s Condé Nast president Bob
Sauerberg: “We’re using this new platform and the clear demand for all access to our content as a way to redefine our subscription offerings at a higher price. The industry is trying to take a step forward because we’re all trying to get more money from the consumer.”

But how long will these pricing strategies work? Digital still makes up only a tiny percentage of magazine publishers’ overall revenues: The Alliance for Audited Media
(formerly the Audit Bureau of Circulations) reported in August that digital replica editions (which replicate most of a print magazine’s editorial and advertising content, and make up the vast majority of magazines’ digital versions)made up just 1.7 percent of overall circulation . The WSJ story says big magazine publishers think digital won’t hit 10 percent of circulation until 2015.

Pricing strategies that very early adopters appear to be accepting are not likely to work for a general population. Magazine publishers may need to adopt more nuanced digital pricing strategies as tablets take off. And they can look to book publishers – who are a lot further along in the digital revolution, with ebooks now making up over 20 percent of revenues at large publishing houses – for some help. Here are a few things they’ll have to think about:

The advertising conundrum

One of the biggest differences between the magazine and book publishing industries is that magazine publishers rely on advertising for revenue while book publishers don’t and never have. Print magazine subscription prices have plummeted, Hagey writes, because “magazine publishers have guaranteed advertisers their titles will reach a minimum number of readers and, to fulfill that pledge, they have long cut prices sharply for promotional subscriptions.”

That’s why you can get an annual print magazine subscription for under $10. In tablet editions, magazine publishers see a chance to charge higher rates. Hagey notes that the average annual price of a digital subscription to a Hearst magazine is $19.99, “twice that of its average introductory print-subscription price of $10.”

At least for now, though, magazines’ digital editions bring the advertising from the print edition along for the ride. So digital readers aren’t getting an ad-free product in exchange for paying a higher price – magazine publishers are just charging more for the novelty of reading on a tablet. That’s a short-sighted strategy that probably won’t work as tablet adoption becomes widespread.

Will readers pay for enhancements?

The bells and whistles that magazine publishers are adding to digital magazines remind me of enhanced ebooks, which book publishers got very excited about a couple of years back. They hoped that by adding video and music to an ebook, they could charge more for it. Fast forward to 2013 and enhanced ebooks are widely considered a flop. So far, readers simply haven’t been interested in paying more for them. Book publishers have scaled efforts back and are no longer trying to charge higher prices for enhanced editions.

Magazines may be better suited to these enhancements than books are: E-commerce fits in well, for example, and videos and music may make more sense. But since a lot of this enhanced material is already available free online, readers may be reluctant to pay extra for it. The benefit for magazine publishers is that they can monetize those enhancements in other ways – through affiliate links to iTunes, for example, as Rolling Stone is doing . And Lucky is about to roll out a major e-commerce component that will likely rely on affiliate links as well.

Promotional pricing can work

Countless self-published authors have found that offering their books at initially very low prices is a great way to gain new readers: When the barrier to entry is low, readers are more likely to take a chance on an unknown name. This strategy is working less well as the ebook revolution progresses (and there’s a sea of self-published books out there), but magazine publishers, in the early stages of their digital era, can take advantage of it.

Magazine publishers already offer print subscribers discounts on other magazines they publish. Why not do the same thing with digital magazines? Or magazine publishers who sell print and digital editions separately could offer print readers a couple free digital issues or a discounted digital subscription for the first year. I also love the New Yorker’s strategy of giving iPad subscribers free digital extras, like compilations of articles on a given topic and cartoon collections.

The good news for magazine publishers is that, with their digital revolution in the early stages, they can learn from those who came before them. The bad news is that many magazines are more threatened by free online content than most books are. As digital magazine reading moves from early adopters to a larger population, magazine publishers will have to find a way to give readers high-quality, no-substitute content at a reasonable price – or risk losing those readers to the internet.

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