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Industry Insight

The Publishing Canary Theory Revisited

For years I have held the position that newspapers were the canaries in the mine to the magazine business.

By Bob Sacks
Published: January 8, 2009

canary_coal_mine3For years I have held the position that newspapers were the canaries in the mine to the magazine business. Whatever the fluctuations in our businesses positive or negative, they have always happened first in newspapers.

Today the alarms are ringing loud and clear in every magazine publishing house around the world. We are in trouble. Advertising results from last year are bad and getting worse for this year. No, not all of us, but yes, many of us, are in extreme peril.


There is common folklore among magazine publishers that magazines are perceived differently from newspapers, which to me is a very thin line of logic. You know the old concept that a paper is read for an hour, and that a magazine is a cherished friend that is read and reread for days, weeks or even months. That may have been true once for the majority of magazine readers, but now only beloved niche titles can claim that honor. Both the time and the reading public have changed. It is a tenuous thread told to advertisers who now want more than “pass-along-readership” numbers. Advertisers want real time-data, identity, history and buying patterns. In short they want numeric accountability. Got any?


It has taken just a few years for newspapers to come face to face with their imminent demise. Some have moved to the web, while others have just closed up shop. The reading public has gone to the web for their news and who can blame them? You get news on the web and “old” in the newspapers.


It seems the thing to do now is redesign the core elements of our logic and our business models.


The newsstand circulation models are old and getting older. The cost of doing business is large and getting larger. Many magazines will survive in print but the success rate is hard and getting harder.


My hope is that in this moment of great attrition is actually a healthy process for the industry and that when we reach the next stable economic plateau we are stronger, more vibrant and focused intelligently on the getting the job done with greater efficiency and restraint than we do today.

 

Discussion

By Michael Turro on Jan 08, 2009

Bo, you keep hitting the nail right on the head, don't you? I share your hope that the industry will learn from the "this moment of great attrition" - and I think it will. It might take a while and a lot of good pubs will die, but there will be those that understand the times, understand the flows of digital information and how human interaction with that information is fundamentally new and different. It will be those folks who build the new models. It will be those folks who find the natural (and profitable) equilibrium between dots on a sheet and pixels on a screen. The only question I have is how many of those folks are out there right now working to make it happen?

 

By Brian Regan on Jan 08, 2009

It is certainly obvious that change must happen and SHOULD happen. I feel that the pendulum swung towards Globalization and perhaps it will now swing towards Localization. That combined with personalized content.

If VDP can send me info, images and even coupons for things I am interested in, why not information, editorials, news based on what I am interested in? My own personal magazine or newspaper......

 

By Andy McCourt on Jan 11, 2009

Bo,
"It has taken just a few years for newspapers to come face to face with their imminent demise."
Imminent demise? How imminent? This month? This year? This decade, century?
While you make some good points, this sweeping statement is plainly not accurate. Suggest you poll Goss, MAN Roland, KBA, Tensor and maybe Rupert Murdoch and the Indian newspaper barons too to guage just how 'imminent' the demise is.
Shifting, changing, adapting, rationalising, consolidating, cross-media-ing, targeting, re-inventing are more accurate, no?

'News' is only the front and next 4-6 pages of most modern newspapers; the rest is analysis, opinion, entertainment, information, feedback, interaction, advice, research, revelation, human interest, local non-news stories, politics, religion, business....it goes on.

It's obvious real news will break first on the internet - that's why the best news websites are run by newspapers. Their next challenge is to build the bridge between that activity and the printed, delivered item, which although it will change dramatically, will not totally demise - imminently or for a long long while.

 

By Michael Josefowicz on Jan 11, 2009

It's not newspapers that are broken. It's the idea that advertising will support anything with reach

Here's a paragraph from Seeking Alpha
the link:
http://seekingalpha.com/article/112400-the-end-of-brand-advertising

"Pundits will argue that with increased ad targeting, profiling, and all sorts of other algorithmic alchemy, online ad revenues will be boosted. In my opinion, such talk is nonsense insofar as brand advertising (not direct response) is concerned. Rather, a seismic shift is underway – one that will not only change the nature of advertising, but will also show that the last century of offline advertising witnessed a tremendous amount of money being flushed down the toilet. We are a lot smarter than we were 50 years ago, and those analog dollars really should have been analog pennies all along."

Now that the advertising game is coming to close, magazine publishers and newspaper publishers are going to have to invent stuff that people will willingly buy. Given how much people love Print, it shouldn't be that hard, but it is a different way to think about it.

 

By Michael Josefowicz on Jan 12, 2009

To Andy's point, I just found this on the internets. . . re Goss.
They just appointed a new CEO.
http://www.packagingessentials.com/indnews.asp?id=2009-01-12-15.36.13.000000

"Goss International supplies web offset presses, finishing systems and aftermarket services for newspaper, magazine, catalog and other commercial printing applications. The company has nine manufacturing facilities in the United States, Europe and Asia and generated more than $1.1 billion in sales in 2007."

I don't know how they are doing, but they are definitely doing.

 

By Gordon Pritchard on Jan 12, 2009

I've never understood why newspapers encourage their paper readers to visit their website - but the newspaper's website never encourages readers to go to the paper to get the in-depth story.

 

By Michael Josefowicz on Jan 12, 2009

Because they drank their own kool-aid about the Internets. And got intimidated about the real value of Print.

Plus most newspapers in the States don't have that many in depth stories.

 

By Andy McCourt on Jan 12, 2009

Hehe...not sure about Kool-Aid drinking but most newspaper's online/internet production departments are seperate from the print production guys by a galactic revolutionary year. My experience of the online side of papers is that they are happy to collect the news content from the journos and photographers; and then 'build a wall' inventing their own geeky little universe that looks down its nose at the presscrews and prod managers. Until this is rectified by a unification of news gathering (the single news desk), production and marketing we will continue to see, as Gordo implies, this stupid, stupid, stupid divisiveness within newspapers whereas the smart ones will simply see the two (or three including cellphone) viewing methods as just different delivery vehicles. Like having a Big truck and a motorcycle - both different delivery methods but united in purpose.

 

By Michael Josefowicz on Jan 13, 2009

Please excuse the shameless self promotion, but..I did a post this morning on the great blablabla about newspapers. If you read to the bottom you'll see where the opportunity is for Print(ers).
http://sellingprint.blogspot.com/2009/01/more-newspaper-blablaba.html

Meanwhile to Andy's point..
I sold Print for 30 years. No doubt it has been a Rodney Dangerfield calling. The alleged "creatives" just don't give you any respect."

Replace "designers" and "marketing" with "editors" and "journalists", same sh*t, different day.

 

By Rick Littrell on Jan 13, 2009

Andy brought up a good point about the separation of "paper vs. web" in the editorial departments. That separation is absurd and artificial. Content is content and the way it is distributed is a production issue, not an editorial issue. The sooner those walls come down and the "news" organizations focus on reporting, analysis, and commentary, the better it will be for all.

Now all they have to figure out is how to change their existing revenue model from advertising to...?

 

By Brian Regan on Jan 13, 2009

There is a huge push happening on places like Twitter where an everyday Joe/Jane can disseminate news faster then any other media. This also erodes the current business models of many newspapers and tv new shows for that matter.

There is a differentiator here that is in the traditional media's favor, they are held to standards in reporting quality, whereas the average person posting on Twitter is not. Having unfiltered, unsubstantiated information is dangerous. Every wonder why its illegal to scream "FIRE" in a public/crowded area? What if Pakistan read a fake Twitter post that said India was invading right this moment... What if the person reading it from Pakistan had their finger on the nuke button?

Regardless, I agree with those saying that the content is KING. People pay for content, thoughts, new ideas.

 

By Michael Josefowicz on Jan 13, 2009

@ Brian,

So suppose slow is the new fast. Actually I think that these days, content is pretty easy. Context is king.
as in "Ok that happened. What does it mean? Do I have to care about it?"

Now you're getting to Print's strong suit.

 

By Andy McCourt on Jan 13, 2009

Some top-notch thinking and articulation going on here. I followed Michael J's 'self-promo' link and it was 100% worthwile. Here's a clip:
"Maybe some of our viewers who are in the world of Print would like to take some time out of the day to have a meeting with your local newspaper publisher and help them with their problem. Tell them about versioned print, database publishing and ultra niche publications. You can also point them to this story about local advertising."

There you have it, nothing I can add to that wisdom.

Brian R's point on journalistic integrity is also at the heart of the matter. I don't think any country would 'go to war' based on a blog comment though. The anarchic internet is already regarded as a dodgy source of truth - apart from bona-fide newspaper and other sites spawned from print communications. Oh and sellingprint.com also of course. Whackiness will always be around but printed whackiness is there 'stet' - to stand for what it is in perpetuity or until it is recycled. MAD magazine never attempted serious commentary. Internet whackiness is just so much graffitti on a cyber lavatory wall, unedited, unverified, often irrational but unfortunately not unpublished. The social networks are a different matter. The first publisher (or newspaper feature editor) to come out with a magazine branded 'Facebook Mag' 'MySpace Real' or 'Twitter Read' is on a surefire winner. Googlezines, Mr Brin?

The reason this very forum works is because of the integrity attached to WTT. The men and women who post are almost all from print communications. We are trained communicators with, as Brian says, standards, adequate ethics, better than average general/historical knowledge, and a caring for our kids' futures.

I think the integrity lesson was learned when Orson Wells produced his (50s?) radio play War of the Worlds as if it was real - and thousands of Americans fled New York. Do that on the internet today and someone will post "Wow, these Martians will be so kool.. can't wait to see their Facebook profiles"

Then to Rick L (big Hi from Oz mate!): he noted:
"how to change their existing revenue model from advertising to…?"
We can make millions correctly answering that one! I don't have it yet but it feels like it has something to do with 'less is more' and the targeting MJ cites. Advertising 2.0.

I think is was Lord Leverhulme of Unilever who said: "50% of my advertising spend is wasted but I don't know which 50%"
Anyone who can identify the 50% is on a winner.

 

By Michael Josefowicz on Jan 14, 2009

Andy said, "My experience of the online side of papers is that they are happy to collect the news content from the journos and photographers; and then ‘build a wall’ inventing their own geeky little universe that looks down its nose at the presscrews and prod managers."

I think that is finally begin to change. Some newspapers more, some less.

A quote:
"Then, after we’d won the battle of publishing online first"

The link:http://www.newsless.org/2008/09/the-article-is-not-the-story/

 

By Eric Walton on Jan 14, 2009

@ Andy

"Like having a Big truck and a motorcycle - both different delivery methods but united in purpose."

I think it may be a more apt comparison, given the current sentiment amongst the folks I know, if you use 'horse drawn carriage and automobile'. This goes more to the author's comment about "imminent demise".

As I read it, your comparison would indicate a need to use one vehicle or the other based on some quality (size) of the thing being delivered, where one does not completely replace the usefulness of the other.

In my comparison, based on my take of the author's comments, the thing to be delivered *can* be delivered by either, one is just the more modern incarnation of the other that will make the first obsolete.

All this said, I see a place for print, but this seemed like an interesting way to further the excellent discussion going on here. If print is to survive, your comparison would have to come to pass (quickly) and therein lies the trick.

 

By George Alexander on Jan 15, 2009

This is a fascinating thread. I believe many (if not most) magazines and newspapers will have to evolve into web-only publications if they are to survive. (I know that’s not a popular point of view among print partisans, but I think it is reality.) The revenue will come from advertising; and because the results of web advertising are relatively easy to track, the advertisers will know whether they are getting their money’s worth.

There are already models of how this can work. One is PC Magazine, whose final printed issue is on the newsstands now. Its web site gets millions of visitors a month, and its entire editorial staff is already being paid out of web revenues. It is profitable, and dropping the print version will make it more so.

I admit that moving a magazine for geeks to the web is easier than moving most other publications, and I expect most magazines and newspapers will keep their print editions going even after they’ve learned to survive on the web. But I think PC Magazine does offer a glimpse of what the future will look like for many publications.

More detail about the transition at PC Magazine is here:
http://www.beyond-print.de/site/content/en/channel_news/news_0771.html

 

By Michael Josefowicz on Jan 15, 2009

George,
I have to disagree with that one. The problem is the money. Web advertising CPM's low and going lower. They will be a nice revenue stream, but if they are the only revenue stream, the overhead has to be very, very low.

You're quite right about PC Magazine's audience. But in general the model is going to look more like the New Yorker. Read for free on the web, pay for Print and other stuff. It seems to be going well for them.

My bet is that it's going to be use the web to aggregate copy, identify fans, and harvest the information about who is reading what when. And make a couple of bucks from the web.

Then the real money comes from inventing new stuff - Print, CD's, t-shirts, cocktail parties - and sell them to your fans using your website as the store.

 

By Andy McCourt on Jan 15, 2009

Eric W wrote:
"As I read it, your comparison would indicate a need to use one vehicle or the other based on some quality (size) of the thing being delivered, where one does not completely replace the usefulness of the other."

Close, but not quite as literal as that. Information (occasionally even knowledge) is the final product and humans like to get their information/knowledge from a variety of sources these days. How that information gets to the user is the delivery method - either by bytes or molecules. Molecular delivery is problematical since it requires a lot of energy, manpower, multiple logistic resources and can therefore take an inordinate amount of time to reach its destination.
Coincidentaly, yesterday I had a sandwich with one of the brightest publishers-online and print- (okay the brightest if you're reading it!), in Australia. We were in violent agreement that the major hurdle facing newspapers and news-oriented magazines is the delivery system. Even with home delivery, you can end up with a soggy slug of pulp on a rainy day (even when wrapped). Newsagencies/newstands do a valiant job keeping the dream alive but can not carry the burden by themselves. We now see supermarkets with newstands, papers in coffee shops, free on trains, free by hand-out, free in piles by the road etc.
Digital, multiple-site newspaper printing will alleviate much of the timliness, environmental and delivery issues. Micro publishing, hyper-localisation and of course localised advertising, will provide the economic modelling. As with all targeted, 'rifle' media, as opposed to 'shotgun' - we will see fewer copies printed because what you are eliminating is the wasted shots.
So the motorcycle could be viewed as a nifty delivery method, able to weave in-and-out of traffic, deploy rapidly, carry lighter loads but faster and use less energy. Please, not a literal Harley here!

On one of George's links I read a great comment. There are more horses in the USA today than at any time pre-automobile. It's just they are not used for transport, unless you are Amish. Most are beautiful fine thoroughbreds or leisure animals. They are looked up to and respected, treated well and regarded often as 'noble' and 'dependable.'
Think the grandeur of Kentucky (Rick! help!)

That could be print communications in the future...noble and respected, not used for the bulk of information/knowledge dissemination, but still widespread and powerful.

For newspapers, targeted digital printing has to be the long-term answer.

 

By Michael Josefowicz on Jan 15, 2009

Andy,
Just one small quibble. BTW, I love "in violent agreement", expect that I will steal it.

My quibble is to add to "targeted digital printing" + high tech offset web printing. There is a great post I found today here.
http://deadtreeedition.blogspot.com/2009/01/can-transcon-transform-newspapers.html

It's an inspiring story of how good our printers can be.

 

By Andy McCourt on Jan 15, 2009

I agree, and I agree Michael, we too are in violent agreement (TM).
I was on gush overdrive I guess. Here in Oz, at least two web offset printers I know are using the combo heatset/coldset configuration, with ultra-automation. WA News, Perth with KBA Colora/Comet: http://www.print21online.com/news-archive/kba-wins-70-million-wan-press-deal/

and APN News and Media at Yandina in Queensland with MAN Roland Geoman/Uniset :http://www.apnprint.co.nz/sites_plants/sites_aus_01.shtml

This indeed is the way to ensure web offset prospers. Digital will sit under this apron for some time, but I did say 'long-term.'

And I think I owe you an apology as it was your link and not George's that led me to the horse analogy.

 

By Michael Josefowicz on Jan 16, 2009

I guess Oz is the name for Australia? Pretty cool.FYI - a native New Yorker calls Manhattan, the City and of course, Brooklyn is Brooklyn.

In any case,
one likely path is going to be newspaper printers moving into commercial print. Lots of excess Print capacity between editions plus it is one way for newspapers to produce stuff they can sell to their readers.

My problem is that I'm strictly a sheetfed guy. Offset, digital, silk screen, letterpress, I even did a sheetfed gravure once.

But I don't have a granular understanding of the various finished products that might come off a web. Of course I know all the direct mail stuff and FSI's and newspapers. But if designers knew more about what finished forms can come off a web plus some idea about minimum practical run lengths, I think they could start to get to work on inventing a new series of Print products.

For example, IMHO, super market shoppers could be a great form for high school education print publications and local newspaper product. Shoppers instead of textbooks? I think there is a way to make that work beautifully.

Any advice about unnoticed possible web products that this new equipment now makes practical?

 

By Dr Joe Webb on Jan 16, 2009

Though the idea that newspapers could sell their press time on the commercial market sounds attractive, it is not likely. There are numerous reasons why.

Newspapers have a history of being active in the commercial market, stemming from the late 19th and early 20th centuries when they were often the only business in town with typesetting equipment. This changed as the big metro dailies developed, but many small market newspapers have had their finger in the business to the tune of about $1-2 billion a year.

Since those times, the newspaper and commercial markets have developed their own specialized equipment and processes. Newspaper presses are poorly suited for the commercial markets because their press operations have never been exposed to the competition of the marketplace, and neither have their management styles and processes.

It is more likely that commercial printers with large web presses may be able to convert their operations to the newspaper markets. A big issue is that these operations are often in small outlying geographies, especially in the midwest, and not near every big population center. There are a thousand or so commercial nonheatset printers who specialize in non-dailies, college and high school papers, and other specialties. These companies have not usually had the higher rate of capital investment that the rest of the commercial industry has had, but it is more likely that these businesses can take over as many small dailies change their print schedules to be in nondaily format.

Keep an eye on Transcontinental who is active in these markets in Canada and will be in San Francisco,

 

By Katherine Gekker on Jan 16, 2009

Back to magazines from newspapers, and, Brian, in the interest of posting sooner rather than later, and thus NOT double checking this report from EDSF:

According to the Print Industries Market Information and Research Organization there are more magazines, and more new magazine titles, appearing each year than most reports indicate. The study identified 26,140 magazine titles, of all types and frequencies, published in North America during 2006. Of this total, 16,050 were U.S. consumer magazines and 7,270 were U.S. business magazines. All of these titles had been published regularly for at least a year (or, in the case of annuals, had published their second edition). This is the largest and most inclusive number of titles ever specifically identified and demonstrates the breadth, depth, and health of the magazine industry. During 2006, 1,200 new consumer titles were born in the U.S., including 900 consumer titles as well as 300 consumer educational, affinity, and custom publishing titles. Of the new consumer titles, almost two-thirds were annuals, including annual specials, while almost a third were issued four or more times a year. Fifty-five new business magazine titles were added in the U.S. One hundred and ten new consumer titles and five business titles were added in Canada. By 2011, the study forecasts that the number of titles of all types will continue to grow to over 25,000 in the U.S. and 3,000 in Canada. However, the study forecasts a 10 percent decline in total pages included in all North American magazines in the next four years. Reported in EDSF Report, September – October 2007

It appears that most of these are more niche-type magazines, following the trend of large department stores being replaced by specialty retailers. Of course, that's the bricks-and-mortar world, similar to our ink-on-paper world.

 

By Michael J on Jan 17, 2009

@Dr. Joe,
Your points are well taken. So that problably means the driver of new Print products that newspapers can sell to their viewers will come from the commerical printing sector, instead of the newspapers themselves.

Good news for us. Sounds like a plausible market opportunity. Meanwhile today's post on what's going on in Minn. sounds like exactly the kind of thing we should expect going forward.

 

By Andy McCourt on Jan 18, 2009

This thread continues to produce really fascinating and intuitive thinking. Michael - yes Oz is Australia, where wizards live. Wizards in print anyway. We're right next to the cheapest sources of printing (Asia) and still our industry manages to fight on, invest, survive although one could not say prosper right now. APN who I mentioned do a lot of magazine printing (heatset) both for their own (coldset)publications and contract work, but they do have a successful sheetfed operation too. It's long been the goal of newspapers to fill idle time with commercial work, but I essentially agree with Dr Joe - there are limits due to finishing, versatility, culture and so forth. Having said that, I was impressed with the Goss Folia 600 press at Drupa - Harris M600 pedigree but web-to-cut-sheet at 30,000 A1 sph I recall. Great concept - I have heard of only one sale though; to France.
Once a newspaper goes combination heatset/coldset and can switch between the 2, it should open up certain commercial opportunities but these are likely to be from their existing client base or for publications they control, such as tourist guide 'newzines' in areas where they also publish a daily/bi-weekly/weekly. Their sales people can then offer the new product to existing newspaper advertisers, with the added benefit of longevity, higher quality and broader distribution. Main limitation is in the finishing - often plain vanilla, maybe with a 'fudge' topping, in newspapers.

 

By Michael J on Jan 18, 2009

I would be interested in people's opinion of two ideas.

1. Does it make sense for newspapers to network with commerical printers. One to share sales people. Printer salespeople could cross sell advertising. Get a normal commission from the newspapers. And sell commercial print at their normal commissions from the Printer. The second would be for newspapers to act as Print brokers according to standard industry protocols.

2. I believe that if some creative design talent started from the "plain vanilla" finishing, they could innovate new products that are of same form, but meet the needs of new markets in education ,health and government with appropriate content and design.

 

By Andy McCourt on Jan 18, 2009

Comments on Michael's points:
1) I have seen this tried over and over again in Australia. It sometimes works in country towns, where the newspaper is looked upon as 'PrintGod.' but even then, the commercial division is run either as a separate business, or is so culturally removed from the newspaper that the two don't talk to each other. Personally, I do not believe space sales people can successfully sell print. Their job is to sell ads, vacant space, ideas, promises, concepts, abstractions. No disrespect to the above but good print sales people need a deep understanding of the process, possibilities, technicalities (impositions, eg)and are more consultative in their selling. I know of one situation in a town of 40,000 where the owners of the newspaper and also the commercial sheetfed shop, installed CTP but wisely decided the 2 business should share the platemaking - enough capacity was there. The commercial guys wanted advanced colour management, ICC profiles, spectros, 50D viewing etc - the newspaper guys flatly refused to get involved. 'We fix everything on press' was the stance!

2) It's all possible but there appears to be a cultural divide again. Like, a newspaperman can't be bothered to get involved in a Matt/Gloss Cellglaze with keyhole die-cut and gatefold inside. He just sees finished papers shingling off the line and into bales, then onto trucks and thinks 'job done.'

Having said all that, the first newspapers to seriously address Michael's points and force it to happen, will discover new and interesting revenue streams. But they will need high-level digital and database management to make it work IMHO.

 

By Michael J on Jan 19, 2009

Your description of the cultural divide between ad sales and print sales sounds just the crux of the teaching print sales people to adopt consultative sales. The good thing about a cultural problem, is that the money needed to change it is minimal. The bad news is that it needs the time and focus of managers and a realignment of incentives.

As long as the commercial sales person is comped as a percentage of the big job,they focus on the big job.

So..what would happen if a sales person was comped on the life time value of the customer. Formulas could be devised -similar to NetAssetValue for long term investments.

Maybe a way to do it is to team an ad sales person with a commercial sales person.Then work out a formula for joint comp based on the overall customer buy. Maybe advertising specialties could be part of the mix.

If it is too much trouble and pain, hire the kids out of school. I could imagine a group of newbies, mentored by a couple of experienced pros, that could do very well.

A little more far fetched, would be to set up an apprenticeship program with a local university. The kids learn the business by getting business. And, if you are really lucky, maybe you could get some of the rivers of education training money to offset the time of mentoring.

 

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